One major hurdle that many freelance designers are facing is how they manage their finances. For those, who had the opportunity to be freelance designers for a long period of time, they can attest to the fact that their finances can go down every now and then.
Due to the fact that many freelance designers are not able to manage their finances appropriately, it becomes a great obstacle in achieving their set goals. For that reason, I have come up with some budgeting tips to assist a great number of freelance designers as well as other freelancers on how they can control and maintain their budgets.
Avoid These Common Freelancer Money Problems
Here are some of the common money problems that many freelance designers face and tips on how they can overcome this hurdle.
1. Irregular income: You may have great earnings in one month and pocket little money in the another month. It is commonly known as the “feast and famine” cycle. This cycle can really be a challenge to you if you are used to one pay check to another. This is a factor that has played a great role in many people’s life opting out for freelancing. For you to remain in the field of freelancing, you should ensure that you do not spend everything you earn, especially during the times you are having great earnings. Do make sure that you set aside a part of your earnings, as this will help you a lot when you are going through tough times.
2. Poor marketing: Mostly, people do not take marketing as an important element in a money crisis. This is a key element in the decline of a business. Lack of proper marketing of a freelancing business, especially during peak times may lead to breakdowns. During peak times people focus much of their time doing the work and overlook to market themselves and find themselves without any new tasks later. The key to this is to make certain that you promote your freelance design business throughout your peak periods. You can achieve this if only you program your timetable and set some time aside for marketing purposes.
3. Lack of knowledge regarding your income: Another element that many freelance designers find hard is to project their income. Many designers do not calculate how much they want to earn on a monthly basis as compared to the customary worker who knows the exact figure that he is supposed to earn monthly. The solution to this is to establish a way to keep your account updated by keeping records, keeping track of how much is owed to you for completed projects in addition to what you intend to earn on the uncompleted projects. Make sure that you up-date the statistics of what you expect to earn on a monthly basis. It is also important to make a record of clients who have the tendency of making late payments.
These are just some of the general money hurdles that freelance designers face. However, there are some other tips to check your finances.
Tips for Balancing a Freelance Budget
1. It is a bad policy to spend what you do not have in your account. It is, therefore, important to spend and budget on what you already have.
2. You should make it your policy to work as though you have a set time limit for projects. This will assist any freelance designer to save a lot of time. Make sure that you complete projects on time and look for more projects.
3. It is essential for you to set aside some funds for savings and taxes. The more projects you do, the more your funds are expected to rise up, and you will be ready to pay the bills on time.
4. It is important to keep searching for new projects. Don’t focus much on projects that pay well for a specified period of time, because when your funds go down so will your project.
Other Budget Tips for Freelance Designers
Below are some more guidelines that would assist designers as well as other freelancers to appropriately manage their finances.
• It is the sole responsibility of the freelance designers to pay their income taxes. It is, therefore, important to come up with a rule to ensure that you pay your taxes in time to avoid any inconveniences.
• For the self-employed individuals, it is also your prime responsibility to pay your taxes that your employer would have paid on your behalf.
• Ensure that you maintain a very low monthly budget as much as possible. Make all payments if possible with cash and avoid any debts. This will help to sustain your budget during the tough periods.
• Freelancers should make it their habit to budget for their payments on a monthly basis. Even though you are not a regular income earner, this will help you in the long run.
• It is of essence to check around before making any decisions. Don’t accept a deal just because you have been offered a good pay. Look deeper into it and establish whether it is a worthwhile deal. As they say, “If the deal is too good, think twice about it”.
• Freelance designers and other freelancers should manage their budgets wisely, they should make sure that they do not buy or purchase what they don’t need. This saves money for more important tasks. It would be of no use to purchase something that you may not even use.
• It would not hurt at all to sell what you don’t need. The funds obtained will assist you in the long run, since you can save money and use it during the famine cycle period.