The freedom and flexibility that working as a freelancer brings is a dream for many working in nine-to-five office jobs. Freelance careers offer not just flexibility but control over your time, schedule and career. However, despite the hugely positive draw to going freelance, it can be a somewhat unpredictable and unstable means of making money, let alone saving. For our generation saving can seem like a distant pipeline dream, but it’s even more important when looking to go freelance. Savings for a freelancer enables you the security to have a quieter month, without worrying that you won’t have enough to make ends meet. However, it’s incredibly difficult to save when you’re only just finding your feet – often in the beginning even just paying your rent is stress-inducing enough, without attempting to think about putting money aside in a savings account. Frankly, it’s not even an option for most newbie freelancers. But with increasingly expensive demands on our finances – for instance, the price of renting an apartment letting alone buying one – having a stash of savings is more important than ever. Now that I’ve sufficiently scared you into the importance of savings, let’s look at ways you can save money in the early days of your freelance career.
Keep working your day job
Since freelance work doesn’t have to be a full-time job straight away, there’s actually no need to leave your current job, and it might even be advisable not to, just while you’re finding your feet. Begin your career slowly in your spare time, focusing on getting your business and brand up and running, and taking on smaller jobs that won’t be too time consuming if you have the opportunity. This will allow you to save money while finding your feet in your new freelance career path, as well as having the security of a reliable income while you get started. Try to save as much as you can during this period, as there will come a time when you’ll want to turn to freelancing full time, and it would be incredibly helpful if you could have a pot of savings ready for this time to help ease the financial pressure.
Bring out the budget
A budget is (sadly) essential if you’re wanting to save money, and even more so when you have no fixed income. I know it’s not the most interesting way to live and can feel restrictive, but a budget is so important as it will allow you to designate a portion of your earnings each month to savings, as well as rationally working out how much you can afford to put away. Without this, it’s far too easy to overspend – albeit accidentally – on things such as your grocery shop or socialising. Get your expenses down to the bare essentials so that you can see clearly how much you will need to live on while your freelance career gets going. Keep in mind this is the time to start shopping in the ‘value’ section of the supermarket, not dining out bi-nightly. Don’t put pressure on yourself to start putting away chunks of savings instantaneously; start small, and increase the amount in proportion to your earnings.
Avoid unnecessary luxuries – relativity is key!
When you have an exceptional first month or two as a freelancer – and this will happen – do not get carried away and start living like Mark Zuckerberg’s got nothing on you. After months of frugality it can seem so tempting to ‘live a little’, but aside from the odd treat you really would be sensible to put the majority of this money away for not-so-fruitful times. Particularly when freelancers can receive large sums of money upfront (or at the end of a long project) a mistake that people often make is to go wild and upgrade their car or splurge on an expensive holiday, instead of putting this money aside. It’s easy to suddenly forget the months of scrimping and saving, but ideally you’d want to be in a position where living quite so frugally isn’t necessary – and savings will help you achieve this. If you put money aside you can afford to treat yourself, without going from one extreme to the next financially month to month.
Supplement your income through investment
For these with a background or even interest in finance stock trading, forex markets and investments can be an excellent way to save money and supplement your income, if you focus on long-term investments. Although obviously, this isn’t an advisable option for everyone – particularly those with no prior experience. Look for a well established broker that offers free trials and a ‘learn’ feature so that you’re able to gain experience before considering whether this is a viable way for you to save. You’ll need a small amount of capital to get yourself started so this may be right for someone who already has some savings behind them, and it’s not something that will yield results straight away. It can be though an excellent way to build up savings, assuming that you invest little and wisely, and never bet more than you can afford to lose.
Reduce unnecessary spend as much as you can
When you’re only just starting out don’t jump to hiring an office space straight away, and certainly not an employee. As tempting as it may be, it’s a rite of passage for every freelancer to go through that awkward working from home in your pajamas/local coffee shop, before you (hopefully!) become successful enough to establish your own base. Since you can’t be sure in the beginning of exactly how much you’ll be making, it really is best to avoid any unnecessary costs and use that money instead to put away in savings. Then, when it comes to needing your own workspace you’ll have the money to do. For some freelancers, they find it suits them best working from home, and in fact see that as some of the positive attributes to having a freelance career. Which brings me to my next point. With all this new found freedom at your disposal, try not to get carried away with the unnecessary spend on midday drinks and lunches with friends. It can really be tough turning down that habitual morning latte, but unfortunately when trying to establish a freelancer career this money really would be better spent being put towards your savings account.
Making the jump to freelance really can be the most rewarding and satisfying career move you’ll make, but I can’t stress enough how far a bit of self restraint and forgoing of some previously thought ‘necessities’ will go in the beginning. You have limitless potential to make money (something you don’t have in a salary job) but at the same time, it’s not always reliable and there can be times when finding work is more difficult that others. In times like this it’s so important to have savings to bring you the security of not having to worry about money and support you as you grow your freelance career.