With freelancers transforming the economy and changing the face of the UK and global workforce, there are more and more people choosing to move into self-employment and freelancing than ever before. It offers flexibility, a degree of autonomy and the opportunity to pursue projects that interest. It has a huge appeal, and as so many of you are opting to do this, today we want to share with you 4 financial tips for freelancers.
Take care of your tax and legal responsibilities
The first thing that you will need to do is take care of your tax and legal responsibilities.
Spend some time familiarising yourself with your tax obligations and ensure that you do register as self employed within the first three months of working for yourself.
Keep accurate bookkeeping records, with all receipts, invoices and payments documented. There are software packages to help you to do this, or you could employ a freelance bookkeeper or accountant to take care of it for you.
Know your worth
When you start freelancing it is difficult to know just how much you should be charging and earning. This is new terrain for you so take the time to understand the industry and typical rates for the work that you do.
You might find that initially you offer to work for lower rates when you are pitching jobs, in order to build up your experience and gather testimonials from satisfied clients. This makes absolute sense, but please do ensure that as your portfolio grows you do take the time to review and revise your rates so that they are commensurate with your experience and skill set.
Draw out a set salary
As freelance income can be uncertain, it can be worth getting into the habit of drawing out a set salary amount each month.
Whether you are working on a long term contract or your work means that any given week you can be working on a variety of different projects, this will help you to manage your money from month to month.
Drawing a regular salary should help you to cover those months that are quieter and take the pressure off you during those downtimes. You will probably notice over time that there may be busier and quieter quarters throughout the year in your industry, so this will enable you to balance them out.
Make long term investments
Investments can offer good returns and can provide you with your retirement funds.
Do take the time to get advice around retirement planning, in particular pension advice. You might build up a portfolio of short and long term investments to ensure that you are comfortable. You will need to weigh up the risk versus the reward with any investments that you choose to make.
There is then always the option to invest in currencies and commodities other than straightforward money and the markets. You could invest in property, in gold, or perhaps try Bitcoins. If you are looking to try cryptocurrency, do check out the latest news around them according to InsideBitcoins.
