Earning money from home is not for everybody. Although it very well could be! There are many simple ways to do this. We have earned hundreds of pounds completing surveys in our spare time.
Maybe you think you don’t have any other options as a stay at home mum. Maybe you’re a mature student hoping to earn a little money alongside your studies and achieve financial security. Of course, you have loads of flexibility, but there are significant downsides to freelancing, too. For example, you can’t rely on that monthly salary, and you don’t get paid holidays.
If you’ve chosen—or fallen into—the freelance life, these tips will help you create a little extra financial stability.
Make the Most of Geographic Flexibility in Managing Your Finances
If you’re working from home in an online field and all you need to do your job is a laptop and an internet connection, you could, in theory, live anywhere in the world.
I certainly carry out my online job even when I am on holiday. That’s one of the perks of working online.
Have you thought about relocating to a city with a lower cost of living? As a digital nomad, the world is your oyster. It’s not surprising that exciting and diverse cities like Kuala Lumpur and Bangkok boast huge communities of expatriates from all over the globe who earn their money online.
If one of the draws of the freelance life for you was the freedom to do as you please, why not take advantage of your geographic freedom and save some cash while experiencing life in a new place? You’ll encounter new people and cultures, and who knows, you could end up staying longer than you thought you would.
If international globe-trotting is not possible for you, you could still pick a less expensive city in your own country. Cost of living within countries tends to vary widely across cities, so you could find a town not too far from home that has everything you need. Already started looking for movers? Great! The sooner you settle in a less expensive town, the sooner your freelance existence becomes more financially secure.
Go For 50/30/20
As a good rule of thumb, those in the know where finances are concerned suggest that living on only 50% of what you earn is the key to financial security. And what about the remaining half of your earnings? It is suggested that you divide that between what is referred to as your ‘flexible expenses’ (anything you don’t technically need, but do want) and banking as savings. Aim for 30% for your flexible expenses and no less than 20% for savings. If you can live by these magic numbers, chances are you’ll be in a strong financial position before long, even if you aren’t earning a huge amount.
You may or may not decide that in managing your finances, you could use the 20% sometimes for paying off long term bills such as mortgage payments. This will help, and be more beneficial in the long run. This is something we have learned the hard way.
Track Your Spending
One of the most effective ways to build financial security on a freelance income is to keep tabs on what you are spending day-to-day.
A hallmark of the freelance life is irregular income—some months, you will earn more than others. With this in mind, simply allowing yourself to spend all the money in your account each month is not going to work out, as you’ll need some of that for leaner times.
A spending tracker will help you make sure that you’re staying within budget and never living beyond your means.
No matter why you’ve chosen to be a freelancer, balancing the books can be tricky. These tips will help you get your finances sorted.