Ways to Secure Financial Freedom Through Freelancing
If it’s on your vision board to secure financial freedom through freelancing, there are a few things you should keep in mind to meet that goal.
Everyone has seen those articles occasionally flash by explaining how this or that professional raked in a staggering six-figure sum in one year of freelance work. However, the truth is, finding extreme success as a freelancer is a bit like making it big as a musician or an artist. Is it possible? Yes. Is it likely? Probably not as much.
Now, that doesn’t mean you should abandon your freelance hopes and dreams and head back to grind things out at your old 9-to-5 job. Why not? Because, if you take things seriously and don’t treat the move as a panacea for your problems or a magic button, you really can find financial freedom through a freelance career. Here are a few tips to help you do so in a sustainable, realistic manner.
Regularly Schedule in Time for the Administrative Tasks
First thing’s first, even the most successful freelancers aren’t going to get paid a dime if they don’t take time to regularly tend to the administrative side of things. This is referring to the responsibilities that are required to keep your workflow and finances in order. You know, the stuff you aren’t paid to do.
It’s easy to let administrative stuff go by the wayside, especially when you feel the pinch to make as much money as possible. However, it’s an absolute priority that you regularly schedule in time to ensure that you’re covering administrative basics, such as:
Getting paid: Set up spreadsheets to track your income and establish clear guidelines for how to invoice each client.
Maintaining a steady flow of work: If you’re a freelancer, it’s up to you to keep the work flowing in. You can’t prioritize work today at the expense of work tomorrow. Take time to apply to jobs, reach out to past clients, and do whatever it takes to keep that work lined up as you go along.
Meeting financial goals: It’s important to set financial goals and then regularly check in to see if you’re meeting them.
Responding to clients: Good communication is a benchmark characteristic of a good freelancer. Don’t get so focused on your work that you neglect to respond to client communications regularly and promptly.
Keeping a clean administrative house creates a foundation on which to build genuine financial security.
Build and Maintain Two Budgets
As a freelancer, it’s important to build two different budgets into your life:
A Personal Budget: This is the budget that you would have regardless of your professional occupation. It should account for the cost of your basic living expenses, recurring debt payments like a mortgage or student loans, savings, and so on. As a freelancer, it’s also important to use this budget as a gauge for the bare minimum income you require.
A Business Budget: This budget should focus on your income and expenses as a freelancer. These should be kept separate from your personal life and should be accounted for in a different bank account and through a separate budget. The one area of crossover is your estimated required income from your personal budget, which you can use to help create your business budget, as well.
Create a Financial Priorities List
Along with two budgets, it’s also important to create a “financial priorities list” that organizes your financial obligations and desires. This should include items like paying off debt, maintaining or fixing your credit score, and creating both personal and business emergency savings funds.
By maintaining two separate budgets and a list of financial priorities, you can track expenses, set aside business taxes, and keep your personal spending all in line, even as you navigate the ebb and flow of a freelancer income.
Be Realistic About Work-Life Balance
Finally, remember that you must also prioritize balancing work and personal life if you want to create financial security and stability. On the one hand, it’s easy to slip into a work addiction in which you get a high from working and only feel successful by burning yourself. On the other hand, it’s easy to procrastinate and let things like communication and administrative responsibilities slip since you don’t have a boss “watching over your shoulder.”
It’s important to fight both of these tendencies in a variety of different ways. For instance, you can find a freelancer group online and look for an accountability partner to help you stay on track. You can also embrace the work-life balance by spending some time on the road and enjoying the remote work aspect of freelancing.
However you go about it, if you want long-term financial stability, you must learn to meet your financial needs without turning into a workaholic in the process.
Being a Financially Savvy Freelancer
Many financial aspects must be mastered if you want to be a successful freelancer. In fact, in many ways, the most important skill of a freelancer isn’t the freelance work itself, but rather being a savvy entrepreneur. The ability to handle your finances, cover your basic expenses, pay off debt, and keep work and money flowing in all take an intense amount of focus and skill to maintain.
If you’re willing to apply yourself, though, you can slowly master these concepts, build your own personal financial system, and eventually establish a firm sense of financial security as you operate your own freelance business from wherever you please.
Noah Rue is a journalist and a digital nomad, fascinated with the intersection between global health, personal wellness, and modern technology. When he isn't searching out his next great opportunity, Noah likes to shut off his devices, head to the mountains and read novels based in the American Southwest.