Brilio.net - Becoming a freelance worker is a job that is currently often done by students, especially generation Z. Being a freelancer does have its pluses and minuses.
The advantage of being a freelancer is that we have very flexible time and can adjust the time we want without being tied to an agreement from the office. The worst part is getting complaints from clients, the rest you can manage yourself, including incoming and outgoing finances.
The minus is the matter of uncertain income. Very different from those employees who have a monthly salary. Therefore, it is important for freelancers to have financial management skills.
How to manage money for freelancers must be done carefully, because if you don't, your financial condition will be messy and it will easily run out. Apart from that, if you are not good at financial management, then you will definitely not have savings.
If you're curious about how to manage finances for freelancers, check out the tips that brilio.net summarized from various sources, Thursday (15/2). These tips will help you so that your financial condition is not in shambles, live comfortably and save.
1. Create a monthly budget
Being a freelancer definitely has an income according to the projects you get without being concerned about working hours. Therefore, it is important for you freelancers to create a monthly budget that includes the average income you earn in a month.
Apart from that, also plan expenses for basic needs such as food and transportation when you have high mobility. It is also important for you to set aside money as an emergency fund or insurance.
2. Separate personal and business finances
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Even though your income is uncertain, sometimes as a freelancer you also get unexpected income every month. You must pay attention to this so that you don't mix your personal money with business money to avoid unexpected expenses. You can use different ways to open accounts to separate the types of money you have.
3. Set reasonable rates
As a freelancer, you also have to be smart in creating and determining rates or prices for your services. Don't let yourself not understand the market because it will really affect your income later.
Try to adjust the price of your services to find out what income you will get. Before determining the rate, you can study and see how the market is around you or ask other freelancers so as not to kill the market price.
Apart from that, determining rates according to market prices helps you to get long-term freelance work. Your clients don't feel expensive, so when they have other work they can ask you to freelance.
4. Protect yourself with a contract
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Even though freelancers have the freedom to choose clients, you also have to pay attention to aspects of the contract with the client so that you know what you will get when you experience losses while working. This is important to protect you, make an agreement that includes compensation to protect yourself if an accident occurs at work, so that you are not careless.
5. Take advantage of financial technology
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In this modern era, you can use technology to help manage your finances so you don't waste money. There are many applications that you can use to create bookkeeping, such as QuickBooks or FreshBooks, to find out your income and expenses regularly. Apart from that, you have to consider the process and method of paying your clients so that it is safe without harming either party, you can use online payments.
6. Save an emergency fund
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You already know that being a freelancer has an unstable and very fluctuating income. You must anticipate this by planning an emergency fund to take care of you at any time.
Saving emergency funds applies to everyone, you can overcome income instability as a freelancer by continuing to save and creating emergency savings. Never delay saving!
7. Make long-term investments
If you already have a lot of income and are smart in managing your finances, then try to continue improving your money management skills. As a freelancer you can also invest the money you already have, the investment is of course long term and has a value that will continue to rise. Remember that being a freelancer is vulnerable to unstable things.
When working, you definitely want to achieve a comfortable life while still being able to save, even though you are a freelancer, you can still get those two things. However, you have to know the points above so that you can live comfortably and still be able to save in the long term.
Managing money as a freelancer requires discipline and a strong awareness of your finances. By implementing the tips above, you can create a solid foundation for your financial stability as an independent professional. Feel free to adapt this strategy to suit your own needs and situation.