08 Nov 3 Money Mistakes Freelancers Should Avoid
As a freelancer, dealing with erratic finances can often take a little bit of getting used to. This is especially true for those who’ve decided to pursue a freelance career after working in a regular office job and having a guaranteed monthly salary for years, where not knowing exactly how much money you’re going to earn this month can be a very daunting prospect. When it comes to money, however, many freelancers make some crucial mistakes which can often make or break their business and success. If you are worried about money, this can affect the quality of your work as you may rush to get more done in order to be able to earn more. Because of this, avoiding these top money mistakes is important.
As a freelancer, getting your first big payday can be an incredibly rewarding experience. For many freelancers, simply being paid a few hundred pounds more than usual can often call for a celebration, as after all, any freelancer will tell you that having a ‘good’ week or month financially can sometimes be a rare occasion, especially when you just start out. But, when you do finally earn a decent pay packet, it can be tempting to treat yourself, whether it’s a new laptop, brand new car, or a holiday. But, spending all of this money at once could be an unwise decision, as you can never tell whether you’re going to need it in the future. So, save your money and if you really do need that new car, opt for a cheaper deal – this used cars Shipley dealership has plenty of fantastic bargains.
Making Too Many Financial Commitments
So long as you have an average-good credit rating, most people can purchase a whole range of different things on a pay-monthly basis, or even use a credit card or loan to pay off their purchases. Although this can be a great way of spreading the cost of the various things that you buy, as a freelancer it’s important to remember that you can’t always guarantee how much money you’re going to earn from one month to the next, so be careful when it comes to making monthly financial commitments that you will have to uphold, regardless of your income. Setting up too many direct debits or overspending on credit cards and hire purchase items can lead to serious financial problems in the future if you’re unable to keep up with the payments.
Not Having an Emergency Fund
Before you even begin your freelance business, it’s essential to have an emergency fund in place in order to keep you financially stable if you have a bad week or two. Since freelance work can be very unpredictable, especially if you haven’t been able to land any regular clients yet, making sure to have enough money to at least cover your rent, bills and groceries for a couple of months will help to keep stress at bay!
Do you have any financial advice that you’d like to share with fellow freelancers? We’d love to hear from you in the comments.