According to one study, there are about 57 million Americans who do freelance work.
If you want to be your own boss and set your own working hours, you may want to look into freelancing. However, you’ll need to be really good at managing your own finances.
If you’re interested in becoming a freelancer, make sure you keep reading to discover the best personal finance tips!
1. Be Ready for Ups and Downs
While freelancing has its benefits, there are many highs and lows in this career. It’s not a constant job, so if you can’t handle that, you may want to look elsewhere.
However, if you’re okay with handling that, you’ll need to make sure you have enough money saved up when the freelancing pool dries up. When you have a lot of money coming in, make sure that you set aside some of that into a savings account so you can still pay your bills when things are slow.
You’ll also earn a different amount of money each month. So you should make sure that you track it each month. This will help you realize certain trends in the industry to help you prepare for the future.
2. Have a Separate Bank Account
You should also make a separate bank account for any expenses for your freelancing. This will make sure that you don’t end up spending anything on personal items that you would need for your business.
It will help you budget if you’re the type of person who has to spend money as soon as it’s in their account. It can also help give you an easier way to track your finances so you can customize your budget better.
It will also help you know what you can write off your taxes for next year.
3. Create a Budget
You should make sure that you have a budget set up so that you know where all of your money is going. You can’t stop spending money on personal things until you realize how much you’re actually spending on things. You might realize that there are actually a lot of places where you can cut some spending.
Some people use a notepad or a planner as a way of tracking it, but you can also use an Excel sheet and set up formulas to calculate all of your money for you.
You can even generate a check stub to keep track of how much you’re bringing in.
4. Save for Taxes
Lastly, make sure you save enough to pay your taxes this year.
Most businesses take out the taxes before employees even get their paycheck, but freelancers have to do it for themselves. So find a good CPA and have them advise how much they think you’ll owe net year.
Discover More Personal Finance Tips for Freelancers
These are only a few personal finance tips for freelancers, but there are many more of them out there!
We know that it can be overwhelming trying to navigate the world of freelancing, but we’re here to help you out!
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