There’s nothing worse for a freelance writer than unending cash flow problems. Maybe you’ve been working for a client who doesn’t pay on time, or have been working for unfairly low rates that don’t account for a good income.
Either way, you slowly but surely start to fear that freelancing might not be able to meet your financial needs.
Even worse is that some writers give up, and opt for the 9 to 5 jobs that don’t fulfill them. Others report feast-and-famine cycles, and periods where they’re scrambling for a gig. This could all be attributed to a lack of understanding of a proper cash flow system.
What is a Cash Flow System for Freelancers?
This is the movement of money through your business. Ideally, you want cash flowing out of your business slower than it flows in. When things go wrong, you’ll realize that you’re spending more cash than you are making.
In this case, you’ll realize that you’re making enough money but it doesn’t show up fast enough to cover your bills. All you need is some careful management to make the most of your money
Enter personal finance tips for freelance writers!
You no longer have to worry about staying afloat! These 4 finance tips will help you stay ahead of the freelance writing game:
Charge appropriate rates
I know, I know! It’s easy to start with rock-bottom rates as a freelance writer looking to land quick gigs. But, this may not be a smart move. While $10 for a 500-word article will help you score the job, and make somewhat of an income, it’s not the recommended professional rate for your work.
Take time to understand what you deserve so you never settle for low-paying gigs. Don’t be afraid to quote competitive prices for your work. This will help you stave off the “empty bank account syndrome.” Also, if you have clients you’ve worked with over a long period of time, and have a good relationship with them, it’s probably time to ask for a raise.
Do you really need Netflix, Hulu, AND Amazon Prime? Probably not.
Consider buying generic brands at the grocery store rather than name brands.
Do you really need that new pair of jeans you just saw an ad for on Facebook?
There are numerous websites that give people really good advice for cutting costs everywhere in your budget.
It’s best to write down the amount of money you spend for three months, and then analyze your spending patterns to see whether you’re happy with the costs. It’s easier to eliminate all of your unnecessary expenses if you see them on paper, and know what they are.
As you grow your income, you should set aside an allocated monthly amount for a six-month emergency fund. Now, this is the most challenging, yet most rewarding, accomplishment for any freelance writer.
Knowing that you have savings to fall back on when times are tough will give you the extra oomph to get the job done. And, you can put a price on that piece of mind!
Pay your bills slowly
Contradictory, isn’t it? Instead of paying bills twice a month, only do it when they’re due, Doing the former could render you broke rather quickly. Needless to say, you’re looking to keep as much money as you can in your pocket, Take note of your bill payment dates and only pay when they are due. Meanwhile, the money stays in your pocket.
Track Your Cashflow Trends
Always know where your money is going. Find out when it’s coming in and from which client. Have profit and loss statements that record your cash on hand at the beginning of the month, as well as your expenditures, then find out how much you have left. Quicken is an excellent program for this and it’s easy to use.
By staying proactive with your finances, you’ll budget in a far more effective way. And, you’ll see that freelancing can be a profitable endeavor.
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Louisa Eunice is a freelance writer who has experience writing B2B and B2C content for a variety of audiences and publications. She also writes short-form marketing content for an array of unique brands. Some past organizations Louisa has worked with include TapDesk, Captive Network, Reviewed, and many more.
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