Monday, July 27, 2009

Managing and Putting to Use Your Freelancing Income! by Joe Daley

Freelancing is not a steady income job and there is bound to be many a bump in your path! The unpredictability of income, as a freelancer is the toughest and the most frustrating part. Here are some tips to follow, to travel safely in this rocking ship.

Plan your funds!
Budgeting is a process most people hate to do. But in any sort of business it is always good to make a calculated effort, in terms of money! Create a budget and review it frequently! This is the best way to steer your ship in the perilous sea!

Calculate you expenses!
In order to prepare your budget you need to know the amount of money that you would be spending each month. Scribble down a list of expenses for each category ranging from mortgage to entertainment. It is impossible to predict the accurate value of each expense, but establishing a range is a must.

Prioritize your expenses!
With the list of expenses you have made, it is time now to prioritize them in the order of decreasing importance.

Food and electricity would be given the highest priority in monthly expenses as you cannot afford to do without either of them. Clothes are equally important but one wouldn't consider them a monthly expense. A similar approach is required for all the categories of expenses.

Utilizing your income
With the income being erratic, you must pay the high priority expenses with the available money. The rest should follow depending on whether the month is a good one or a bad one, in terms of income. Entertainment is one category that gets the axe when the going gets tough!

Segmenting your income for various expenses
It is important to manage your income to meet all the expenditures and not 'over spend' in one particular category of expenditure. If you don't fancy yourself in finance management, try the envelope system! Withdraw money from your bank and fill your envelopes. Each category should have an envelope. Your expenditure for each category should be from the corresponding envelope!

Cruise control!
When luck smiles your way, you might have a month or two where your income exceeds the expenditure! Restrain yourself from being prodigal and save for the future.

Saving the ship from sinking!
In case your savings are not enough for you to handle your expenses in leaner months, try to cut down on some of your expenses. Try to take up part time jobs which would augment your income to some extent.

Self accountability
The toughest part of being a successful freelance writer is the fact that no one will guide you or try to keep you in line when you threaten to go off course. Be stringent in following your budget and be accountable to yourself!

Joe Daley
CEO and Logo Designer at