The freelance life can be a great way to make a living. You get to be your boss, set your own hours, and work from wherever you want. But the freelance life isn’t all wine and roses. As a freelancer, you must also be your accountant, marketing team, and HR department. That means it’s up to you to plan for your future and ensure you’re putting away enough money for retirement, healthcare, and other costs. This blog post will give three steps to help freelancers plan for their future.
Know Your Expenses
Knowing your expenses is the first step to planning your future as a freelancer. As a freelancer, knowing your expenses is more important than ever. Not only do you need to plan for your future, but you also need to be aware of the potential tax implications of your work. Fortunately, many resources are available to help you keep track of your expenses and plan for your financial future.
One way to track your expenses is to use an app or software for budgeting. This can help you see where your money is going and ensure you’re not spending more than you can afford. You can also use a spreadsheet or notebook to track your income and expenses. This can be a helpful way to spot any areas where you may be overspending.
Another critical aspect of knowing your expenses is understanding the tax implications of your work. You’ll need to set aside money for taxes each year as a freelancer. This can be done by opening a separate savings account or setting aside money from each paycheck. Be sure to consult with a tax professional if you have questions about how much money you should set aside for taxes.
By understanding your expenses, you can ensure that you’re prepared for your financial future as a freelancer. You can identify areas where you may need to cut back or save more money by tracking your income and expenses. And by being aware of the tax implications of your work, you can ensure that you’re not paying more in taxes than necessary. Taking these steps can set you up for success as a freelancer.
Make Savings a Priority
The second step is making savings a priority. Just because you don’t have a traditional 9-to-5 job doesn’t mean you can’t save for retirement. In fact, according to CNBC, freelancers can save more for retirement than traditional employees because they’re not subject to payroll taxes. That means if you’re putting away $500 per month for retirement, you’re saving $625 per month when all is said and done.
There are a few different ways to save for retirement as a freelancer. One option is to open a traditional IRA or Roth IRA and invest in stocks, bonds, or mutual funds. Another option is to open a solo 401(k) if you earn more than $600 per year from freelancing. Or you could go the simple route and just put money into high-yield savings account each month. The important thing is that you make saving for retirement a priority so that you’re not left scrambling later down the road.
Invest in Yourself
No one knows what the future holds, but as a freelancer, you have the power to shape your own destiny. By investing in yourself and planning for the future, you can set yourself up for success no matter what comes your way. Here are a few things to keep in mind as you plan your freelance future:
- Learn constantly. The world is continually changing, and as a freelancer, it’s your job to stay on top of new trends and skills. Whether taking an online course or attending a conference, ensure you’re constantly investing in your professional development.
- Build up your network. The people you know can be a valuable resource for finding new clients or landing a dream gig. Attend industry events, connect with other freelancers online, and get out there and meet people.
- Don’t forget to save for the future. When you’re your own boss, it’s easy to let saving fall by the wayside. But whether you’re setting aside money for retirement or creating an emergency fund, it’s important to remember that the future is always worth planning for. The best way to optimize your savings is to consult a financial advisor about self-employed retirement plans. This way, you can ensure you’re taking advantage of all the benefits available to you as a freelancer.
By following these simple tips, you can set yourself up for a successful freelance future—no matter what comes your way.
Planning your future as a freelancer may seem daunting, but it doesn’t have to be. By following these three simple steps—knowing your expenses, making savings a priority, and investing in yourself—you can set yourself up for success both now and down the road.