Oct 4, 2019 11:24:56 AM by Mark F
I started this discussion over in the Freelancer forum but I wanted to call attention to it here:
There are some very experienced freelancers, all of whom point out that saving is especially important for freelancing and almost everyone cites the same reason: Work is not consistent and you need, as Tiffany points out, operating reserves.
As you build your business you want to do your best to build a buffer of savings to smooth out those periods when work is not coming in. Here is my last year sales by month:
March through July was grim, and if I had not had savings I would not have made it through until better times in Q4. But another advantage in having a cushion is it also helps keep you from taking a job you shouldn't because you are desperate. I believe that less than scrupilous people out there can smell the desperation on you.
People ask about two things a lot when starting freelancing, how to figure out your rate and how to build a consistent income. In my opinion, these two things and savings are very connected. If you are not making enough on the work you are doing to build up savings then you are not charging enough. I think a very loose but useful calculation is to consider yourself only working half time so your bill rate should be at least double what you need to earn to survive. Then if you take another step back from that and realize that means you will be either working all the time or scrambling for work (what you do with that other half of your time) you might want to adjust it up even more.
When you are working you need to earn enough to protect you for those times that you are not. Your only other option than raising your rates to make that happen is working a LOT. Take your pick.
And the only way I know to build consistent income from inconsistent work is to build up a reserve and pay yourself a consistent, lower, amount from that reserve. The way I do this is that I pay into a seperate company bank account and then pay myself a set salary every two weeks. I don't spend anything from my company account unless it is a company expense. That way when times are good, like last October-December were for me the money builds up and I have that reserve automatically...and also money set aside to pay my taxes.
This is unpaid, unsolicited, and perhaps, unnecessary advice, so take it for what it's worth.
Oct 6, 2019 01:54:28 PM by El Mostafa B
This is really interesting, I feel like these beliefs are innate there, aware of them, but I have never put them into effect. It's true savings save ourselves in harsh times, but to keep myself in the save side I naver achieve. There are always certain things that rise and ruin every plan I had set before.
But your insights are great Mr.
Chapeau
Dec 9, 2023 01:56:41 AM Edited Dec 20, 2023 01:47:28 AM by Cora L
Starting as a new freelancer can be both exciting and challenging. Here are some essential tips to help you succeed and save money as a freelancer: