In this age of full digitization, many people choose freelancers. In addition to being able to work on a flexible schedule and in different places, self-employment expenses are paid on a project basis. Thus, they can simultaneously execute many projects and receive unlimited income. Sounds interesting, right?
However, after gaining these benefits, freelancers must face some risks. Start with uncertain income, lack of medical benefits and pensions. Individuals should have more mature financial plans because they face greater financial risks than long-term financial risks.
If you are one of many freelancers or just want to jump into this world, here are five tips you should carefully consider.
Keep track of how much you should spend each month
The first thing you need to do is record all your monthly routine expenses. They range from basic needs such as food, transportation, premium payments, personal items, investment needs and entertainment. When you get there, you can estimate the amount of budget that you need every month.
Give monthly targeted income
As mentioned above, freelancers can have unlimited income. It all depends on the number of completed projects. For security reasons, it is recommended that you set a monthly target after accounting for monthly expenses. For example, your total monthly operating costs are 5,000,000 IDRs. Then at least you should produce a lot every month. Thus, at least you will not need money to meet your monthly needs. If income increases, you can set aside it for investment.
Adapt to an employment contract
Without an employment contract, the details of independent work are often unclear. Customer demand began so often that your business hours stopped and payments were delayed, so prices were not adjusted. To avoid these problems, employment contracts should be used every time the project is completed. This creates a written agreement that contains important information about your collaboration with your customers.
Do not forget about the emergency fund
This is often overlooked by independents. In fact, the financial risk of temporary workers is much higher. Although they have achieved their income goals, they sometimes perform fewer projects than the original ones. It also often happens that clients often pay their bills, therefore, only if you need to distribute 10% of the income from your emergency funds.
Take advantage of loans without a salary
Freelancers are people too. You must have encountered a situation that requires additional funding. Unfortunately, it is difficult for many independent people to apply for loans from lenders. Often, lenders provide potential borrowers with a payroll account. Customers with a monthly salary are considered more reliable because their income is stable, so there is little risk of a bad reputation. Freelancers themselves have no wages. As a solution, you can use a credit service, the terms of which can take the form of an account, which you use to receive monthly income. For example, an online loan from Kredivo.
Having decided to become independent, you will work all the time using these five methods. But you will also get rid of financial problems!