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5 Financial Tips For Freelancers

Take a look at these five financial tips for Freelancers before you start your freelancing career and be prepared for anything.

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5 Financial Tips for Freelancers

Making a career change and moving into the freelancing sector is an exciting prospect. Let’s face it: who doesn’t like the sound of being one’s boss? Yet, with great power comes great responsibility; especially so in the financial department.

Take a look at these five financial tips before you start your freelancing career and be prepared for anything.

1. Learn How to Budget

Just because your income is erratic doesn’t mean your expenses should follow suit. In fact, as a freelancer, keeping your expenses in check is the only thing you can do (most of the time). Speaking of erratic income there is a handy tool which helps you calculate your monthly income.

Start by determining your break-even number — the number you need to shoot for to stay in the green each month. List all the essentials you need including food, utility bills, transportation fees, etc. and add them all up to get a total that you need to save up to (and surpass) every month.

5 Financial Tips for Freelancers

Preparing for tax season is yet another thing freelancers should do more of. Too often people get fooled by the amount of money they make only to find out that almost a third of that doesn’t even belong to them.

Separate your personal and business expenses (accounts) to get a better idea of what you’re up for and audit your taxes regularly. It pays to be prepared; quite literally.

2. Make Use of Contracts

The Internet — you will never find a more wretched hive of scum and villainy; except for Mos Eisley, perhaps. By now, probably everyone and their grandmothers were scammed at least once over the Internet; freelancers face this issue almost daily.

The solution: draft a contract for every new job you do to protect yourself from being ripped off by unscrupulous clients. Of course, this does not means you should make potential clients sign contracts for every small gig you do online; use common sense.

Overall, making use of contracts is not only good for your financial well-being but also for your reputation. By insisting on signing contracts before certain jobs, you’ll give off a sense of professionalism and clients will take you more seriously as a result; understand them, they too have been victims of scams in the past.

Protip: for some larger jobs, always include a deposit. That way you won’t have to live primarily off of air until the project’s end; 20% to 50% is the industry standard in most niches.

Make Use of Contracts

3. Know Your Limits

When you’re a freelancer, it’s easy to get carried away by present successes. Yet, the sporadic nature of the job can often leave you in great debt without any real source of income.

What’s more, missing any outstanding payments can impact your credit history beyond repair. The moral of the story — known your limits!

To get a good idea of where you stand, be sure to check your credit score, regularly; especially so when you’re thinking of applying for a loan.

Keeping an eye on this will make it easier for you to apply for mortgage and car loans later in your life, so do try to stay on the safe side.

4. Set up an Emergency Stash

Flexibility means having the freedom to organize yourself, not being free to do whatever and whenever you want (all of the time); that’s called anarchy.

Usually, the best way of protecting oneself (financially) is by setting some money aside in the form of an emergency fund. When you’re a freelancer, you learn the true meaning of a dry season on your skin (too many a time).

Apart from the obvious financial benefits, another thing a stashed cache does for you is — it provides you with an ease of mind. With some funds safely tucked away, you won’t feel as pressured as you would otherwise during these few dry months.

So, start chipping off some funds from each paycheck from now on and put them into a savings account, just to be on the safe side; use an automatic billing system if necessary to keep the payments flowing.

5. Save up for Retirement

The story of the ant and the grasshopper — my favorite. You might be enjoying your high-life now, but, in a few years, you’ll regret not putting away more money for your retirement fund. Of course, by that time it will already be too late… start today!

Since you’re self-employed, you need to sponsor your retirement plan. Depending on your country, there are a few options at your disposal, including:

  • SEP IRA — lower taxes than a traditional IRA.
  • Solo 401(k) — a simplified version of the regular 401(k) plan; made for the self-employed.
  • SIMPLE IRA — employer contributions are tax-deductible in the form of business expenses.
  • Self-managed super funds — a superannuation fund you manage on your own.

Whichever one of these you pick, remember to always contribute to your plan, and contribute often.

Tracey Clayton is a working mom of three girls. She's passionate about marketing and everything tech related. Her motto is: "Live the life you love, love the life you live."

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Business

Influencing Consumer Decisions: Five Principles

An individual or organization’s consumer behavior is based on buying certain products and supporting certain brands. Behavioral, motivational, and psychological issues are the primary focus of this study area.

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Influencing Consumer Decisions Five Principles

An individual or organization’s consumer behavior is based on buying certain products and supporting certain brands. Behavioral, motivational, and psychological issues are the primary focus of this study area.

-Several psychological factors influence how a person responds to advertising, including perceptions, attitudes, and a general view of life.

-The demographics of the audience, including age, culture, profession, age, and background, largely determine consumers’ interests and opinions.

-A person’s social group influences how they shop. Education, income, and social class all play a role in purchasing decisions.

When conducting virtual product testing, you can influence consumer behavior more effectively by knowing consumer trends. Consumer habits and priorities change as businesses do. Today’s tastes are different from 10 years ago, and they will be different ten years later. It is important to keep consumer behavior trends in mind when designing and improving your marketing strategy.

5 Principles of influence

In his study of social influence, the researcher formulated six universal principles to understand behavior change. The principles can be used by businesses and consumers to understand purchasing behavior better and determine what strategies are most successful.

1. Reciprocity

Humans are often compelled to repay favors or reciprocate kind gestures. For example, the consumer might get a free product sample or a substantial discount.

2. Commitment

Engaged people are more likely to stick with something. The idea here is to cultivate brand loyalty; once someone has used a product or service, they are more likely to repurchase it in the future.

3. Consensus

The more people who do something, the more likely others will do it. Consumers are likely to buy into brands to demonstrate their popularity or satisfaction among a large customer base.

4. Authority

Experts tend to have listened to more than the average person. To convert new consumers, a relevant expert talking about the effectiveness of the brand’s product or service is more important.

5. Liking

Persuading a consumer to buy is more likely when the person is similar to the target consumer. It is far easier to convince consumers with similar characteristics – whether ethnicity, socioeconomic status, religious inclination, or common interests.

Conclusion

When companies are equipped with these five principles of influence, they can better navigate potential consumers and convert more sales. However, the long-run consequences of manipulation could spell disaster for the researcher as he warned against crossing the line between influence and manipulation.

Whether the principle of influence exists in a given situation should be an issue that people, companies, and marketers consider – that is, do they have to manufacture it, or can they discover it? Nobody wants to be a smuggler of influence and using the power and claiming to be an expert when they’re not will ultimately lead to negative results.

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