WHY’S FINANCIAL PLANNING FORFREELANCERS SO IMPORTANT?

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As a freelancer you don’t have the benefit

of a regular pay packet like in a normal 9-5

job and it’s definitely one of the areas of

concern for people moving from regular

employment and into full time freelancing

work. Financial planning for freelancers is

essential.

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The very first step that you should be taking

is finding an appropriate accountant to make

sure that your structure as far as taxation is

the right one as there are numerous

different ways that you can operate as a

freelancer and come end of financial year

tax time, selecting the wrong option can

leave you with a sizable debt that probably

hadn’t been budgeted for. Do this for the

same reason other people hire you –

taxation and legal structure is complex, get it

right by hiring a professional.

GET PROFESSIONAL TAX ADVICE

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Separation of Business and Personal

bank accounts is another must do.

When you’re working with clients it’s

easy to make the mistake of seeing

business income as personal income

but that’s simply not the case. After

all, you’ve got both business

expenses as well as personal ones.

SET UP SEPARATE BANK ACCOUNTS

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BUDGET CONSERVATIVELY You also need to set yourself a

budget as you enter each financial

year of what you anticipate your

incomings will be and remember,

conservative estimates are always

better because if you set your

budget based on where you’d like

your business to be during those

twelve months you run a very big

risk of having a cash flow shortfall

during the year, and being unable

to pay your bills.

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SAVE FOR RAINY DAYS

Another must have is to ensure

that you’ve always got emergency

savings put aside just in case the

amount of incoming business

you’re getting goes through an

extended slow period, especially

over times such as Christmas and

New Year where a lot of businesses

shut down.

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INVEST IN YOUR HEALTH

I also wanted to quickly touch on

something that most people

don’t think about when they

decide to do freelancing to earn a

living and that’s your health.

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One of the downsides to

freelancing is that if you don’t

work, you simply don’t get

paid. If you don’t take good

care of yourself it can firstly

impact how much you earn,

but as a flow on effect can

also cause you to miss

deadlines.

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TO SUM UP

Financial planning for freelancers is

often overlooked because it seems

daunting and unfamiliar to most of

us. But there are some simple steps

you can take when you set out that

aren’t difficult or expensive which

will set you up well for the future.

THANK YOU

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