01 Jun Freelancing: How To Manage Your Money
Working as a freelancer comes with its own challenges, and one of them is managing your finances. Now, you’ve got to look at your financial situation a lot differently to how you did when you were a regular employee. No longer will you be able to sit and relax while someone else deals with taxes and other complicated financial matters for you. It can be easy to let your finances get out of control, so let’s have a look at a few ways to manage your money.
Start Learning About Tax Returns
As a freelancer, one of the most irritating things that you’re going to have to get used to is the idea of tax returns. They don’t come around all that often, but when they do, they’re a nightmare. So, the best thing you can do at this point is to start learning about them. By having a better idea of what you need to do when the time comes, you shouldn’t find that they’re too difficult. If you wait until the last minute, you’re going to be panicking!
Separate Your Finances
You don’t have to do this, but it can help to make managing your finances much easier. By separating your personal funds from your business ones, it’ll give you a clear indication of your profit levels. If you keep everything together, it’s difficult to differentiate between business and personal finances. Whether you need to do this depends on how good you are with managing your money in the first place.
Chase Up Invoices
Working as a freelancer means that you’ll potentially be working for lots of different people all at once. With this comes a responsibility to complete invoices and get them over to people on time. Unfortunately, they aren’t always paid as quickly as you’d like, and a lot of people won’t remind you if you haven’t sent them an invoice on time. They’re busy people! Because of this, you must make sure you have a track of what invoices have been sent, and whether you’ve been paid.
Seek Help If You’re Struggling
You can have all the best intentions in the world, but it’s easy for your finances to get out of hand if you’re no good at managing money. Companies like Hudson Weir can be found online to try and help if you’re struggling with finance issues. Utilise them if you need to, especially if you find yourself in a position where you’re facing bankruptcy or huge debt issues. It’s very difficult to turn your situation around if this is the extent of the damage.
Finally, let me reiterate this to you: keep records of everything! By that, I truly mean everything! Ideally, you should get a finance book that can track all of your incomings and outgoings. You never know when you’re going to need these records, especially when it comes to those all-important tax returns. Fail to do this, and you could be out of pocket unnecessarily.
If you’re new to freelancing, don’t worry. It won’t take long to get used to the lifestyle, and you should find it much easier over time!