The world of freelancing is becoming increasingly popular amongst entrepreneurs, but the main downside is always security. Self-employed business owners and employees alike all fear the day that things suddenly stop working out within their self-started company. You have bills to pay, and you can’t run the risk of financial ruin.
Yet, keeping your freelance empire afloat is much the same as keeping any business afloat. There are always risks of the market taking a turn, but your business isn’t at any greater risk than any other company within the industry. If you want to better protect your finances as a freelancer, however, then here are some tips to ensure that your company and personal funds remain in the green.
Pay your bills and debts
Either on a personal or business level, you probably owe some money in certain areas. You might have had to borrow money to fund necessary elements of your business empire or perhaps to help pay for your house or car in your personal life. The worst thing you could do is shift those debts around and hope for the best. Your priority should always be to pay off the money you owe straight away.
Work out a budget, and constantly rework that budget depending on changes in your business and personal life. When you’ve worked out how much disposable income you have per month, after unavoidable expenses such as utility bills and perhaps resources for your freelance business, you need to be putting the rest of your available monthly income into paying off your debts. This is the key to keeping you and your business from financial ruin.
A safety net
Every business and business owner needs a financial safety net. No matter how successful your freelancing empire may be or how careful you might be with both your business and personal account, there’s always the chance that an emergency will strike either at home or at work. You need to ask yourself whether you have the financial protection for such an occasion. An emergency fund is an absolute necessity. You might also want to look into options such as One Sure insurance if your self-employed work involves the buying and selling of a variety of things, such as vehicles, as you want to keep your assets safe. There are also insurance options available for freelancers in terms of professional indemnity; regarding clients who make claims against you because they’re unhappy with your work.
Think about your future
When you head down the freelance career path, it’s up to you to think about your future finances, your retirement plan, etc. This means needing to think about pensions and investments you can make with your income and savings to make sure you can live comfortably when you retire. A private pension is a good place to start, but you should also look at investments you can market. Getting started with a SMSF Swyftx investment could be what you need to grow your savings ready for your future. Your retirement might seem like a long way off, but it’s something you need to start thinking about now.
Keep an eye on your taxes
In a regular job as an employed individual, your employer will usually handle all matters regarding your taxes. You won’t even have to think about that, and any taxes you do fill out at the end of the year will likely involve very small amounts of money you may have made in other areas. As a self-employed individual, however, it’s very important that you read up on tax laws to ensure that you’re well within their bounds. You need to be keeping track of all the money you make each year to ensure that you announce it all on your tax returns.