Many creatives don’t like to think about money. They enjoy what they do, and if they had their way, they’d focus solely on their art and not the finances. However, if you want longevity in your career, especially as a freelancer, there are some financial principles you must understand and implement.
Diversify Your Income Streams
Don't leave money on the table. If you can charge for a service or product, do so. As a freelancer, there will be times when you experience low bookings, work lulls, and even burnout. Diversifying your income streams can help cushion these periods. Whenever you have the opportunity to make extra money from your offerings, take it. This might mean expanding your services, creating passive income products like e-books or courses, or even taking on short-term gigs outside your usual scope.
Set Up a Retirement Savings Account
While saving for the ups and downs is important, it’s equally important to save for your retirement. Unlike 9-to-5 workers who often benefit from employer-sponsored pension plans or 401(k) accounts, freelancers must take their retirement planning into their own hands. Divert some of your earnings into a retirement savings account regularly. This ensures that you’re not only thinking about your present financial situation but also securing your future.
Charge in a More Stable Currency
One of the challenges with many local currencies is their instability and frequent fluctuations. The value of the money you have today might significantly differ from its value in a few years. If you have clients abroad, it’s wise to charge in more stable currencies like USD, EUR, or GBP. This practice helps maintain the value of your earnings when converted to your local currency. With services like Geegpay, you can open USD, GBP, and EUR bank accounts instantly, making it easier to invoice your clients and convert your earnings at competitive rates.
Keep Work and Personal Accounts Separate
Separate your work account from your personal account and pay yourself a salary, just like an employer would. This practice helps you budget better, track your earnings more effectively, and prevents you from spending all your income from a single gig. By having a clear distinction between business and personal finances, you can manage your money more professionally and ensure you have funds allocated for taxes, savings, and business expenses.
Always Ask for an Initial Deposit
Never start work without securing an initial deposit. Too many creatives have horror stories of clients refusing to pay or negating agreements after the work has been delivered. By asking for a deposit before commencing work, you safeguard yourself financially and ensure that you’re compensated for your efforts from the outset. This practice also helps in filtering out serious clients from those who might not value your work.
Final Thoughts
Freelancing and content creation are businesses and should be treated as such. As your own boss, you need to make decisions that benefit you and your business for the long term. Your financial health is as important as your creative output, and managing it well will allow you to thrive in your freelance career.