It’s no secret that many freelancers don’t have fixed incomes, especially those who are truly freelancing and are not tied to an employer. Besides that, there may come times when a freelancer doesn’t have enough work, so they don’t even cover regular living expenses. The conclusion is clear – freelancers must learn how to save and invest, and this is how to do it:
Freelancers should minimize their expenses and set automatic payments
The first thing every freelancer should do is to create a separate account from their business one, which leads to decreased spending. Tracking all expenses for at least one month can easily show what expenses were not necessary, and where the money goes – but it shouldn’t. Another good piece of advice is to set automatic payments. This is very important for certain bills that can’t stay unpaid, as well as for savings – no matter how small.
Getting rid of debts
There are no smart savings when someone is in debt, no matter a freelancer or not. Yet, with freelancing, you should be even more aware of what debts bring. Rank your loans by the total interest that is required to pay back. Once the debt is paid, and your automatic payments are set, a freelancer should focus on basic life needs.
Freelancers should think about other sources of income as well
Reaching financial stability with freelancing is simple when you have another source of income, no matter how small. Think about investing in a certain hobby or doing some regular part-time jobs. Once a freelancer achieves this, they can start thinking about creating an emergency fund – it’s not hard to make one once you have two sources of income.
Yonkerstribune.com claims that it’s a good idea to think about investing in mutual funds, especially if you are a freelancer. A Systematic Transfer Plan can help freelancers leverage the income from debt. This also creates a great plan for everyone who is thinking and saving for retirement.
