How Freelancers Can Better Manage Their Finances

Guest blogger Lisa Froelings is a business and productivity consultant with over 4 years of experience in human resources working for a major retailer in the country before she decided to build her own business. Her interests include technology, mindfulness as well as time management. 

The acceleration of connected technologies has generated a thriving digital ecosystem, which has dramatically changed the way we approach work. From the evolution open plan workspaces to the development of the freelance workforce. As the freelance economy continues to grow, it’s estimated that over 50% of the working population will be full-time freelancers in the United States by 2020, resulting in the demand for self-employed individuals to rise. While the freelance ecosystem has greatly contributed to a more innovative and independent workforce, self-employed workers still face challenges, one of the biggest being financial management.

Unfortunately, it’s still not uncommon for contractors to be underpaid for their efforts, and it can be a demanding task to manage invoices and personal finances on top of everything else. Fortunately, the growing tech sector has understood these challenges and now caters to the growing freelance economy, offering self-employed workers tools that will help them gain more control over their professional lives, resulting in a more confident and empowered workforce.

Join a freelance association. To combat the various issues many freelancers face, especially when they’re just starting out, there have been freelancer associations cropping up around the world. From the Freelancers Union in the United States to the Canadian Freelancers Union, these associations aim to educate freelancers on how to better manage their money, while also helping them protect their rights. Knowing how to write a solid contract, in addition to having access to affordable benefits, like health insurance can make a considerable difference to your paycheck. In addition to having access to important resources, being a part of a freelance network can increase your chances of finding clients and potential collaborators

Hire a consultant on your side. Like the freelancers union, investing in a financial consultant will offer you much needed support. Providing advice about how to manage your finances, while also offering valuable professional knowledge. Budget specialists provide guidance concerning everything from managing daily expenses to recommending investments that will put you in a more secure financial situation. In addition to helping you secure a more comfortable position, budgeting experts can help carve out a tailor made plan that will help you prepare for the future, which is essential if you are a first-time freelancer. While a financial consultant will ultimately aim to help you survive out there on your own, building a network of experts gives you a  safety net that you can rely on if you face any difficulties or make any big professional changes.

Invest in a project management software. If you already have some experience freelancing, you may be a good candidate for investing in project management software. From personal expense trackers to digital accounting tools for small businesses, project management software are user-friendly, in addition to being up to date on specific freelancer needs. For tracking hourly rates, Toggl is a time tracker that is designed to help freelancers keep accurate records of their working hours. The time tracker not only tracks working hours but also save this information in a shareable spreadsheet that can be shared with clients, making sure you are never underpaid. If you are looking to improve project management, Asana helps track the status of each project, which is useful for freelancers that collaborate regularly or have multiple clients. As project statuses can be share with clients, payment dates can be set, ensuring you get paid on time.

Even the most experienced freelancers know that it’s not always easy to earn your professional independence. From clients that don’t pay on time, to managing everything from health insurance to taxes, it takes time and experience to get to a place where you can feel financially secure. Luckily, the freelancers are on the right side of history and thanks to advancements in technology and the development of an increasingly human-centric workforce, there’s no better time to go freelance.

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