As a freelancer, you wear many hats. You are your own boss, marketing team, and accounting department all rolled into one. And while this can be freeing in many ways, it also comes with its own set of challenges—not the least of which is staying on top of your finances.
That’s why we’ve put together this helpful guide on financial tips for freelancers. From bookkeeping to budgeting, along with using Cheqbook, these tips will help you better manage your money so you can focus on growing your business.
Get organized with a system for tracking your income and expenses.
Having all of your financial information in one place will make it easier to track your progress and spot any problem areas. Cheqbook can simplify this process – our platform was built with affordability, ease-of-use and increased productivity in mind. Accuscore can save you an average of 80 hours a year; that means spending less time on bookkeeping and more time doing the things that are important to you. Click here to learn more about how Accuscore works.
Make sure you are setting aside money for taxes.
As a freelancer, you are responsible for paying your own taxes. This means setting aside money throughout the year so you don’t end up owing the government comes tax time. A good rule of thumb is to set aside 20-30% of your income for taxes. You can learn more about self-employment taxes here.
Create a budget and stick to it.
Just because you don’t have a regular 9-5 job doesn’t mean you shouldn’t have a budget. In fact, as a freelancer, it’s even more important to have a budget in place so you can keep track of where your money is going. When creating your budget, be sure to include both fixed and variable expenses. Fixed expenses are things like rent or mortgage payments and car payments—expenses that stay the same each month. Variable expenses are things like groceries and gas—expenses that can fluctuate from month to month. Once you have your budget in place, do your best to stick to it by tracking your spending and making adjustments as needed. Cheqbook is a great tool for this!
Invest in yourself by setting aside money for continued education and professional development opportunities.
Just because you’re not working for someone else doesn’t mean you should stop learning and growing professionally. In fact, as a freelancer, it’s even more important to invest in yourself so you can stay ahead of the curve and offer clients the best possible services. When budgeting for professional development opportunities, be sure to include things like online courses, conferences, and networking events—all of which can help you expand your skill set and grow your business. Additionally, these expenses may be deductible when you file income taxes.
Make retirement savings a priority.
Just because you don’t have a traditional employer doesn’t mean you shouldn’t be saving for retirement. In fact, as a freelancer, it’s even more important to make retirement savings a priority since you won’t have access to employer-sponsored retirement plans like 401(k)s.
There are several retirement savings options available to freelancers, including Individual Retirement Accounts (IRA), SEP IRAs, and Solo 401(k)s. Talk with a financial advisor to find the best option for you and make sure you are contributing enough money each year to reach your retirement goals. We can help you find an accountant – just click here.
As a freelancer, managing your finances can feel like a full-time job in itself. But by following these simple tips, you can take control of your money so you can focus on what’s really important: running your business.