The Freelancers Forum VIF - Insider Insights

Applications Close July 16 2024 #partner

👛 Get to Know Your Wallet

It’s impossible to properly understand your cash flow and budget if you don’t know what’s coming in and out each month. Determine your average monthly income after taxes and deductions. This may vary for most of us, so it's helpful to base it on your average earnings over several months. Next list your fixed expenses such as rent, utilities, insurance, and loan payments. These are predictable and essential for budgeting. Then you can factor in those cheeky variable expenses like groceries, transport, treat yo self spending etc! You can use the past month’s data to estimate the amounts accurately.

💸 Keep Some Aside

Freelancers often face irregular expenses like equipment upgrades, professional development, or marketing costs. Budget a portion of your income each month for these depending on your goals. If you know you have a few client projects coming to an end for example, you might want to set aside a little more money for advertising. This one is a boring tip, and repeated constantly but it’s so important. Save and set up an emergency fund!! All of us experience those random slow seasons, it’s a normal part of entrepreneurship. To make sure you aren’t stressed, save a percentage of your income until you reach a comfortable buffer (ideally 3-6 months of living expenses). Don’t forget to set some money aside for retirement or for investments. We love to use Accorns but obviously we aren’t financial advisors so don’t take our word as gospel!

👀 Track Those Dollars and Cents  

Consider using tools like QuickBooks, Lettuce or Wave for tracking income and expenses. We love that they automate calculations and provide reports for tax purposes. Lettuce takes it one step forward helping you save for retirement and helping streamline those pesky books with their smart automation. Something I didn’t do well at the beginning of my business was maintain separate bank accounts and credit cards for business and personal expenses. You can imagine how much my accountant loved that! Don’t be like me… remember to keep a detailed record of your business expenses, this can help you bring down your taxable income.

🤔 Check in Often

Set aside time each week or month to review your finances. Compare what you’re actually spending against your budget, this is usually a rude shock for me! However, it allows you to adjust and keep to your goals where necessary. Periodically audit your expenses identify any unnecessary or excessive spending. This helps in optimizing your budget and improving financial discipline. Plus, this is your reminder to check your transaction history too! So many scammers out there can take small increments without you knowing.