Working freelance has become an extremely attractive option for many. It presents many advantages, including the freedom to manage your time, the chance to earn more than what you can from a regular job, and choose the projects you work on. But with great freedom comes great responsibility—as we often hear—and freelancing also entails the need for discipline when it comes to managing your resources, such as time, and most especially, your finances.
New technologies and innovation have given birth to an aggressively growing freelance market. However, freelance work still comes with a certain level of uncertainty. For instance, you may be busy on a few projects for a few months but can’t entirely be sure what you’d have on your plate next. It’s an endless jump from one project to another and while that may sound exciting in a lot of ways, you’d only be able to make the most of it if you know how to prepare for the rainy days.
Here are six money-saving tips freelancers should always remember:
Have multiple streams of income.
You may find one project that pays well without you having to work long hours every day. However, you may want to find another, or maybe a couple of smaller projects as some form of security. One thing about freelance work is that the unexpected always happens. Clients can pull out at any time without warning. Having multiple streams of income can help keep you financially secure. It would be a good idea to come up with a project of your own and that which can allow you to earn some passive income (such as affiliate programs) without you having to put in a lot of work on a daily basis.
Expand your network.
Even if you’re just mostly working in front of your computer in your pajamas, always exercise professionalism and make sure to work hard, and with integrity. Whether you’re just planning to work freelance or have been freelancing for a while already, proper networking with other professionals can do wonders for your freelance career. Clients, who are most likely connected to other business owners, would be very happy to send you referrals if they’re satisfied with the way you work.
Set aside an emergency fund.
Since you don’t receive a steady income monthly, it’s better if you keep a portion of what you earn for building an emergency fund. You could still get sick, emergencies could still happen, and you don’t want to be caught empty-handed. Your freelance income may vary from month to month, depending on your productivity, but make it a point to always set aside a fixed percentage for savings. Put your emergency funds in a savings account, where you can access it when needed. A credit card is also great for emergencies, just as long that you only use it when necessary.
Limit working in coffee shops.
The best part of being a freelancer is that you don’t have fixed work hours and you aren’t required to report to the office every day. This saves you money on transportation and food allowances. You also get to determine the hours of the day when you’re more productive, instead of being forced to work within a specific shift. However, a lot of freelancers tend to spend a lot working in coffee shops, which could be costly if done often.
Working at home is much more cost-efficient. It’s still a good idea to go out and work other places from time to time, so you don’t get bored but try to limit working in coffee shops, where it could get expensive. Go to parks or check out co-working spaces in your area. Co-working spaces, designed specifically for startups and freelance workers, offer affordable hourly, daily, or weekly packages and they are also great places for meeting freelance professionals like yourself!
Be a wise shopper.
Being a freelancer allows you to work and do everything else on your own. As you have a lot of extra time in your hands—given that you know how to manage it well—you can take the opportunity to search for better bargains on clothes and household items. You also have all the time for finding the best places to get the best deals on food, gadgets, and everything else you need at home. If you’ve kids or a family, do some research on how to prepare delicious and healthy meals, without overspending.
Should you manage to build a sizeable emergency fund and the money still keeps coming in, you may want to consider making long-term investments. For instance, medical insurance or a retirement fund are forms of investment; so are mutual funds and stocks. You may even start your own business if it’s something you’ve always wanted.
Freelancing has a lot of perks and benefits, but to be sure to make the most of it, you need to be responsible, focused, and disciplined, especially when it comes to managing your personal finances. It doesn’t hurt to save up for emergencies and start investing for the future.
Ryan Del Villar is a writer and online marketing specialist at Money Max, Philippines’ leading online comparison portal. Ryan is also a freelance writer at Helm Word, an Online Reputation Management company. He worked as an online video editor before he started his writing career.