5 Easy Ways to Protect your Finances as a Freelancer
How to protect your finances as a freelancer…
When I started as a freelance writer a few years ago, it was a side hustle and protecting my finances wasn't a top priority because I had another job.
Whether this is the case for you or not, protecting your finances as a freelancer is important because it creates room for more success.
It wasn’t until I decided to become a full-time freelancer that I started looking more into how I could protect my finances, make more money, and be comfortable with my income.
I knew I needed to do these things to feel secure as a freelancer.
Even if you’re just starting out, I highly recommend learning ways to and practicing strategies that help you protect your money sooner rather than later. After all, this is what will allow you to feel happier with your work and have a better work-life balance.
Here are some simple ways to protect your finances as a freelancer:
Learn about personal finance.
Understanding various aspects of personal finance, like debt management, investing, and saving is one of the best ways to protect your finances because it covers so much. There are so many articles, podcasts, and books that go over these things. Just make sure you opt for reliable resources that you trust.
Always have a contract.
Freelancers should always have a contract because it protects you when it comes time to get paid. Your contract should outline the scope of project, your project rate, when your client is responsible for paying you, etc.
It can feel intimidating to have your client sign a contract. But as a freelancer who’s done this many times, I’ve never been questioned for it. If anything, it makes you look more professional. If a client ever resists signing your contract, this is probably someone you don’t want to work with anyways.
Implement late fees.
Your contract should also include late payment fees. Typically, freelancers implement a late fee that's a percentage (say 3%) of the total project costs. You can give your client X amount of time to pay their invoice before you tack on the late fee.
The good news is that if you share this in your contract, you usually won’t have any problems. And if you do, you can always point out what your contract says regarding late fees to encourage your client to pay you.
Raise your rates.
As you gain more experience, you can raise your rates to earn more. You can also increase your rates in alignment with inflation.
It's always a good idea to let your client know ahead of time that you're raising your rates by giving at least 30 days' notice. When you do this, make sure you're comfortable with losing/replacing clients who aren't able to pay more.
Create a budget.
No matter what stage you're in as a freelancer, creating and sticking to a budget is always a smart idea. While there are many ways to budget, creating a plan that will work for you is essential. Check out our article for more freelancer budgeting tips.
Protecting your finances can be scary, but these tips make it easy and allow you to be even more successful as a freelancer!
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