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5 Things to Help Master the Gig Economy by Empowering Your Freelance Finances

5 Things to Help Master the Gig Economy by Empowering Your Freelance Finances

How to Manage Finances as a Freelancer

Empowering your freelance finances is often more complex than for 9 to 5 workers.

The uncertainty of freelance work means you can be turned down for things most take for granted, such as loans.

From managing your taxes to finding work that pays, here are some suggestions.

1. Navigating the Home Buying Process

Buying a house can be tricky for most people and causes stress.

As a freelancer, it can be even more stressful since, while you can get a mortgage, you might be turned down more than an employed worker.

A reliable mortgage broker can be a massive help with this.

One of the reasons why it is more problematic is because the criteria for proof of income and reliable funds are different.

Therefore, you are checked out and vetted more than working people.

Read top tips from finance experts on how to increase your borrowing power to help with this too.

How to Manage Finances as a Freelancer

2. Managing the Tax Situation

We all have to pay taxes but for freelancers there can be many things you can claim that you can’t as an employee.

Depending on where you live and operate taxes can be fairly easy or challenging.

For most people in Australia for example, the PAYG system ensures that taxes are paid automatically.

As a freelancer, you need to set this up yourself if you want to or get professional advice for managing your tax.

You are responsible for submitting returns and paying what you “owe”.

Apps such as Quickbooks are great for keeping track of income and expenditure and will work out the taxes you must pay.

However, it is still up to you to ensure your tax bills are paid in full and your tax returns done correctly, even with the help of professionals.

3. Savings

Freelancing is often thought of as online-only work these days, but there are freelancers in all sectors.

With the rising cost of living and the variability of freelance income, having savings might feel impossible.

But savings are essential for long-term security and emergencies. 

Savings challenges are necessary and it’s recommended you set aside 20% of your income.

4. Find the Services You Will Use

It can be tough to find freelance work, especially when you are getting started.

Depending on the sector, there can be tons of competition.

Fortunately, there are many online services that offer well-paid work.

There are some that will provide steady work at a lower pay rate.

Or you can try your luck with bidding sites such as Fiverr and Upwork.

You will be able to command more money with these kinds of sites.

However, you can go a long time between jobs as you build an online reputation.

Along with services to help you find work, there are other services you will need to run your freelance business smoothly such as marketing services, bookkeeping etc.

All of these come at a cost, although when you are getting started you might be able to trial programs for free for a period of time. Read the fine print though.

How to Manage Finances as a Freelancer

5. Setting Up Multiple Income Streams

It’s easier than ever to set up multiple income streams, as shown in our article with 24 ways to make money in 2024.

Plus, some of the things you do now can generate income repeatedly without any extra work.

Blogging is a great example and one of my favourite options.

A blog opens you up to affiliate marketing, sponsored posts and ads.

There is also YouTube, where you can teach what you know and even offer live classes.

Then there are sites such as Etsy and eBay where you can sell actual products made with your talents.

Summary

Understanding the different aspects of freelancing and your finances will help you manage them better.

Learn what you can, use professionals where necessary (or desired) and work on becoming financially secure.

Finances don’t need to be difficult, in fact, you can be lazy with it and still get rich provided you get the right advice and keep on top of it.

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