More people, especially Millennials, are considering freelancing and self-employment. It comes with benefits like semi-flexible work hours, being able to work at home one day and by the beach the next, and doing away with dirty office politics. However, it comes with its own challenges especially in terms of budgeting and saving your income.
Here are some ways to make sure you’re covered not just for the current month, but for the long run.
1. Establish a Monthly Target
The biggest challenge of not having a full-time job is not having a fixed income. You could be earning P50,000 this month and only half of it the next. What you can do is to identify a monthly target income and try your best to achieve that. Time Money writer Carrie Smith suggests that you leverage your assets to earn more monthly. Consider other online-based jobs or offer consulting services.
2. Pay Your Bills on Time
Those who have a payroll bank account usually automate paying their bills online. You can also do this to avoid incurring debts. Upon getting your monthly income, pay all your bills such as rent and utilities, especially your internet bill since you mostly do your job or business online, and a day without internet connection is going to cost you money.
3. Have a Savings Account That Can Be Categorized into Your Different Saving Goals
Aside from your regular savings account, allot one account that will allow you to divide your money into different categories such as emergency fund, travel, and other projects such as room renovation or an important purchase like a new laptop for work. If you like traveling, you must consider it as a planned expense and not just use your one-month paycheck in one go.
4. Identify Your Long-Term Savings and Start Early
You are never too young to save up for bigger things like retirement, a house, or a car. You should be investing on those as early as you can to enjoy a more comfortable life later on. You should also be planning children’s education even if your kids are still young or even before they arrive. You will be shocked to know how much money you should have just to be able to send your kids to good schools, so it’s better to be prepared.
5. Register for Social Security Benefits
Most freelancers and self-employed individuals do not have employers that manage their social security benefits, so you have to accomplish it yourself. It may seem unnecessary, but you will reap the benefits in the long run, so make sure that you include your monthly contributions to your monthly expense.
Managing one’s income is a challenge for everyone but even more to those who choose to be self-employed or juggle different freelancing jobs. Nonetheless, it can be doable, and if you are smart, you can enjoy the advantages of not having a 9-to-5 job while still enjoying your hard-earned money. The key is discipline and making decisions that will help you achieve financial security.