Freelancers and Finances: How to Make Your Money Work for You

Decided to go freelancing?

Everyone will have different reasons why they’ve decided to take up the freelancing lifestyle.

Some of these are:

  • Saving enough to quit their low-paying job so they can create a safety net when they finally take the jump to full-time freelancing

  • Earning more through freelance jobs, to augment their salary from regular employment

  • Spending time to pursue passion projects, while still earning money on the side

But whatever our reason is (and whatever our professional setup may be), the important thing to remember is that the goal of all our hard work is to secure ourselves financially.  And truth be told, we won’t be financially stable if we don’t understand three things:

  1. Our goal is not to work for work's sake, but to prepare for our future;

  2. We’re going to regret not making a financial plan once we reach retirement, or when a family member gets sick;

  3. The best time to make a financial plan is now.

Real talk: Keeping track of your expenses and savings can be difficult, and investing does sound very daunting. That’s why we’ve prepared five easy tips you can follow now to start your way towards financial empowerment:

  1. A penny today for tomorrow’s rainy days. Murphy’s Law tells us: When things can go downhill, they usually do. So before the worst happens, insulate yourself from unexpected bills by setting up an emergency fund. Save up a portion of your salary good enough to cover you for six months to a year, just in case you’d need to bear the cost of a sudden injury or a replacement for your damaged car.

  2. Cut your credit card some slack. If you can pay in cash, do it. The temptation to overspend and charge it to future earnings can be hard to resist once you’ve started on the habit. Don’t buy more than what you already have in the bank, as much as possible. Before handing over your credit card to purchase something, ask yourself: do you really need an extra pair of shoes, or that trendy blazer? (Probably not.)

  3. Use apps to patch up your leaking finances. You don’t need to whip out your pen and paper to keep track of your expenses-- there are apps like Monefy and You Need a Budget which can help you cut down on your spending and save up. Thanks to your mobile phone, it’s easier to remember where you’re splurging your hard-earned money at, as you can document everything right after you’ve paid the bill.

  4. Get savvy on stocks. How about going for mutual funds? Investopedia gives the lowdown on what you need to know on how you can start investing.

  5. Follow the 50/30/20 rule. Fifty percent of your salary goes to fixed costs, thirty percent to flexible expenses (like that random out-of-town trip or date), and twenty to your savings. It’s that simple.  

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Evan Tan
Evan Tan

Freelancer.com's SE Asia Communications Director.

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