One
of the major advantages of being a freelancer is the flexibility of your time
and the ability to control your cash flow. However, getting yourself caught
off-guard with the volatility or seasonality of your freelance job may nail you
in financial constraints, especially if you are fending for a family or a loved
one. Remember, working freelance deprives you of the fixed income you get as an
employee. With this in mind, being financially responsible with our finances is
a must. Maybe we can consider the following:
1.
Build your Emergency Fund, ASAP
2.
Stay away from debts
3.
Always have a back-up plan
4.
Juggle your work accordingly
5.
Hone your craft
6.
Live below your means
7.
Splice a small percent of your income to
have savings and investments
8.
Get covered
-
Build
your Emergency Fund, ASAP:
Granted that your
nature of work is very unstable (not unless you’re always in-demand 24/7 but
still I’d recommend this), having a tangible fund to utilize during the “rainy days”
would be a great idea. According to financial authorities, a healthy emergency
fund is 3-6x your income safely kept aside in the bank and accessed ONLY DURING
EMERGENCIES. Hence, the term emergency fund.
-
Stay
away from debts:
The last thing you
would want in your life is sinking well below your financial means with the
aggravation of debts. If you can, stay away from scratching your credit cards
every now and then. If you do, pay it completely and on time. Though some
credit cards can offer cash-lending facilities with minimal interest rates
which you could utilize during emergencies, you better leave that only for the harshest
scenarios.
-
Always
have a back-up plan:
This provides a plan B
for the uncertainties of your work. If your income is not going to get you far
for the month, you better have something else to utilize for the meantime to
help augment your shortfalls. Link with other people. Market yourself so people
can recommend you. Make use of your other skills effectively. Daig ang magaling ng maabilidad.
-
Juggle
your work accordingly:
Get enough sleep. Rest even
now and then. Stress is always present whether you are employed or freelancing.
Take vitamins and eat well (but not extravagantly). The last thing you want is
getting sick for this will definitely impale your wallet big-time.
-
Hone
your craft:
Treat your freelance
work as your business. Invest on it by enriching yourself with the latest
trends and innovations in your craft. Competition is rising and you are not the
only one doing your freelance work. Set yourself apart from the mediocre ones,
be the best you can be. You wouldn’t run out of financial opportunities if the people
know you’re the best guy out there for the business.
-
Live
below your means:
Learn to discern what
you want and what you need. Do not get fascinated with the latest “in’s” so
easily. It’s necessary to salvage every little penny you earn. You wouldn’t know
when you’re going to need the extra centavo. Rather than buying something you
do not need today, why not set it aside for savings or investments? That can be
more beneficial in the future rather than the new IPhones and IPads you just bought
because of the spurt of the moment.
-
Splice
a small percent of your income to have savings and investments:
Aside from financing your
emergency fund, you should at least put in a small portion of your income to
savings and investments. This will give you a compelling reason to work hard
and smart. Set aside short-term expenses (grocery funds, bill payments, rent, mortgage,
play money, etc.) in your savings account. However, if you dream of buying a
car, a house, aiming for a business capital, setting aside your retirement fund
or establishing the future budget of your child’s education, you’re better off
with investments such as mutual funds, stocks, and investment-linked
insurances. They will make your money work harder for you. Ideally, you should
set aside AT LEAST 10% of your income for savings and 10% of your income for
investments. Make this a commitment; no one else will benefit from this but
you. If you think you can’t; think of a reason why you can and why you should. Maybe
you can decrease unnecessary expenses (cellphone load, dining out, shopping,
travelling, etc.). Maybe you can walk home sometimes. Maybe you can postpone
buying that new cellphone unit. Kung gusto madaming paraan; kung ayaw
maraming dahilan.
-
Get
Covered:
Make sure your
PhilHealth is up-to-date. If you can afford to have a health card without
compromising your budget, don’t hesitate in doing so. However, the most
important foundation of any financial plan is establishing it with life
insurance. You get insurance not because you will die but because someone else
will be left behind to live. This will make sure that the dreams and aspirations
you have for your family and loved ones wouldn’t get buried six-feet under if
something were to happen to the breadwinner, the dream maker: YOU. Pay it
annually or as frequently as possible; you’ll never know when you may suffer
financially and be unable to pay it on time. Take note, your insurance policies
provides a fund value or a cash value as time goes by, adding another “purse”
to access in the event of needing money for life’s unexpected expenses. With
all the benefits you can get by getting covered and on top of your PhilHealth
or health cards, you’re fortifying your financial shields to make sure you
wouldn’t devastate everything you have worked hard for during the tough times.
---
For any questions, don’t
hesitate to write comments below. I’d be more than happy to assist you with
financial planning. You can PM me so we can talk about it in detail. =D
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