Financial Management As A Freelancer
Financial management is an important part of freelancing. As soon as you quit your full-time job you also quit your regular pay cheque. In the initial period of freelancing, you must be able to survive financially assuming you have very little work on – or that you haven’t been paid yet for work you have done. Carpenter has been freelancing now for a little over three years: “Initially I wasn’t prepared for the enormous swings in my bank balance,” recalls Carpenter. “But after eight months or so, it began to level out – thankfully!”
In addition to giving up a regular pay cheque you have also given up your sick pay entitlement. Now, nobody ever thinks they’re going to get sick, but there are times when it happens. Prepare in advance for the eventuality by regularly putting some money away to cover your lost income.
Income protection is another aspect of financial management you should seriously consider when freelancing, talk to a financial adviser about how best to protect yourself financially.
It’s not all news bad on the finance front though; freelancing often enables you to claim expenses you can’t as a full-time employee. You may be able to claim part of your rent, your phone and power bills and travel if your office is at home.
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