With the New Year comes our desire to improve different areas of our lives. One of the most popular resolutions at the beginning of the year is to save and earn more money. As a freelancer, you need to organize every financial step to make this happen.
Freelancing is when you offer a service to a company without working under employment. Working at LuckyCrush means being a freelancer. This is fortunate because it is simpler. Having a company responsible for providing everything you need to work, your income depends only on you. At LuckyCrush, you don’t need to look for users on another platform or attract them with advertising and content. They are already on the site connecting, and you only have to worry about yourself. But sometimes this can also have its downside. If you are not used to managing independently in terms of organizing payments, this can turn against you. This article will help you take control of your finances smartly!
Manage your money – INCOME
Income is the amount you receive that you can spend on expenses, savings, investments, and protection. Make sure you know what your income is realistic. Take note of the exact numbers you are earning. This way, you can start planning and creating financial goals that will give you peace of mind and financial freedom. This is the first step to managing your money as a freelancer.
Ideally, you should write it down in an Excel document, a finance app, or an agenda. So, as you receive payments, you will be aware of how much money you are receiving per month.
Manage your money – EXPENSES
Now that you know how much money is coming into your personal account, you can move on to figuring out how much money is going out. And again, to do this, you must be as realistic as possible in knowing your expenses.
In a separate column from where you previously wrote down your income, write down each one of your daily expenses. If you really want to manage your money as a freelancer, try to be very honest about what you spend your money on. That way, you will be able to visualize with percentages in which area of your life you are spending more and reorganize what is necessary. (Yup, even that drink you buy every time you go out counts). Keep in mind that your expenses should never exceed your income.
DESIGNING A BUDGET
A well-prepared budget will help us achieve our financial goals in the medium and long term.
The budgeting method known as “50/30/20” is the most recommended so far:
50% of your net income (what you have clean after taxes) goes to essentials: such as rent, utilities, food, and transportation.
30% goes to leisure expenses and less essential needs, such as dining out, going to the movies, and buying clothes.
20% is for the future: saving, paying for possible emergencies, and investments. With this percentage, you should cover your savings fund. Ideally, you should be able to save enough until you have a safety net.
Always have a SAFETY NET
This is one of the most important steps if you want to manage your money as a freelancer. This safety net is made up of the 20% of our salary that we set aside each month. We should be able to cover twelve months of our life with our savings fund. It sounds like a lot, but if you save in stable currencies such as the euro or the dollar, it will be easier to reach this goal. We know this may be the most challenging thing to do, but it will ensure peace of mind in the future. Once you achieve this protection, you should not stop there; you should continue to allocate your 20% to your safety net.
Do not wait to pay for everything to set aside this 20% as this is the first thing you must “pay” as if it were a bill you pay to yourself.
Essential TIPS
Once we have all these aspects clear, let’s go to the essential tips that will help you achieve a stable and healthy economy:
- Have an updated spending plan. Only after you know how much you spend can you take action with your planning.
- Make a budget. The 50/30/20 is the best-known and easiest to follow, but you must focus your budget on your short, medium, and long-term goals.
- Avoid maxing out credit cards at all costs, and always pay bills on time. One of the fastest ways to ruin your credit score is to consistently pay bills late or, even worse, not pay them at all!
- Be aware of all your unnecessary or impulsive expenses, and avoid them as much as possible.
- Have a savings fund for emergencies, investments, and possible life projects, such as traveling and getting to know different cultures or studying or buying a house. This will depend on and change according to the stage of your life in which you are at the moment.
- Always save with the strongest currency in the market.
How to maintain a steady income with LuckyCrush
A good way to not see your finances fluctuate due to your fatigue on certain days when working as a freelancer is to have an average of how much you usually earn per hour online. Managing your work time is the best friend of your money.
(Remember to check our “How To Stay Healthy As A Webcam Model” article to help you).
That is, if one day you worked 2 hours and earned $40, but the next day you worked 6 and earned $80, your average would be $15 per hour. Or if one day you worked 4 hours and earned $100 but the next day you worked only 1 hour and earned $10, then your average would be $22 per hour.
The larger the period you take to calculate the average, the more realistic it will be. Include those hours where you feel you didn’t earn much as well because when you add it up with the hours you were most productive, the result will be much more realistic. And if you are consistent, you will be able to know how much you “normally” earn working a week in LuckyCrush.
If you do that calculation every week, you will know how much your average monthly salary is, the same benefits as a job with a fixed schedule but absolutely relaxed and freelance.
Tell us on our Telegram group how you are organized and if you have any financial goals to achieve this year. We’d love to hear about it!
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