Freelancers getting rich from contract work for flexible work hours and the convenience of remote working is not a myth.
However, it is a challenge that only a handful can recognize the avoidable mistakes, opportunities of smart work and importance of time-management to achieve financial security.
Earning a six figure income can boost your savings but that does not necessarily mean you get the power to decide your ‘roadmap to save wealth’.
Find out the 6 steps you need to take to ensure the ideal, stabilized and balanced flow of money:
1. Protect your income
Income insurance is the closest you can get to truly ‘being your own boss’. It is a financial solution that allows you to secure your income during emergencies when you might be unable to work and afford paying bills.
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2. Grow your network
How many people know you are a freelancer? Everybody you introduce yourself to, duh! But how many of them know what service you contract for? A handful and how many of them would have a suitable job to offer? That’s what we thought.
List yourself as a freelancer on as many platforms as possible, join groups and contribute to discussions.
It’s essential to grow your network as a self-employed independent contractor in order to keep your income flow steady.
3. Create active savings
The return that your bank gives on your annual savings is not worth keeping the capital idle. Take some action and be financially open!
Investing in well performing funds can become a source of income on the side, this ‘activates’ your savings and boosts wealth. Now with DeFi, investments are easy, quick, safe and almost free of charge!
4. Minimise indirect costs
Track your expenses, plan your budget and set your prices. Separating the expenses incurred during your ‘business hours’ from your personal expenses can help you achieve an optimum point of profit.
You don’t want to have uneven weekly/monthly expenditure because:
- Over time there are chances of your indirect costs rising
- You cannot set profit goals
- Your flexibility to work decreases over time with increasing number of bills to pay
- You lose on tax returns
5. File for Tax deductions
Once you’ve recorded even the smallest business expense, you are ready to file for a deduction on the annual income tax payable.
If you diligently grow a habit of expense tracking, it will save you as much as $1000 every year on tax! You can then invest or recycle this capital as you need.
6. Work the clock
Time management is the key to financial stability. Plan your day and work smart. Freelancers often put projects first but that only creates a lag for other equally important things.
Set a routine, prioritize tasks and track your income against hours. It’s important to set income goals over a convenient period of time for securing balanced finances.
Is there more to finance for freelancers?
You are your own boss. This goes both ways. Financial management is different for different freelancers. For some it is easier to set aside a fixed salary for themselves and for others it is easier to fix the cost of running your independent business.
Freelancers need to be financially free for several reasons besides their need for flexibility:
- Banks will prefer a full-time employee with a fixed salary over a self-employed person when giving out loans
- You have to personalize charges for different prospects or clients
- Hiring an accountant is an additional cost
- The concept of ‘promotion’ does not apply to self-employed workers
But we are here to change the narrative! The self-employed community has inspired us to take charge of the future of finance.
Sign up for our latest product and community updates, become an exclusive member of our amazing community and chant with us “Let there be wealth!”