Financial Mistakes Often Made by Freelancers

Freelancing can be a fun and rewarding job. Flexible working hours and being able to work from various places make freelancing the choice of many people. Its flexibility and fast movement also allows you to earn more than a normal job.

However, like any other job, freelancers also need financial planning. Because instead of increasing your income, you may be trapped in financial difficulties that make you have to work extra to cover mistakes.

Financial Problems that Freelancers Must Anticipate

Get extra income as part of freelancing. Sometimes, the hardest part as a freelancer is managing finances. The incoming cash flow was so fast and unpredictable that it was difficult to make a correct budget or estimate.

If you do not have experience in this field, you are afraid that mistakes will occur in managing money. Therefore, to prevent unwanted things from happening, here are some financial mistakes that freelancers often make and how to overcome them:

1. Not considering time and work

Freelance fee calculations vary, depending on the agreement of both parties. In the world of freelance writing, some jobs pay per hour, per word, per article, or per project. Unknowingly, freelance work often cannot be measured in terms of difficulty, so it takes more time and effort than full time work.

When accepting freelance work, make sure you calculate the estimated time it will take to complete the job. Accept offers that you understand the scope of, so it doesn't take more than the deadline. Do not let this work take up time and energy, thus affecting your activities and productivity.

2. Have no savings

Work can be fun, especially if you love the work you do. Early in a career, employees often save for vacation or sick days. Not infrequently, you feel bad when you take time off or even refuse work. This is not a good attitude.

As a freelancer, you get paid as you work. However, it is undeniable that there will be times when you feel tired and just want to rest. In order to maintain your finances, set aside money when you are not working.

This is done so that you still have money to meet your needs when you're not working and don't have to take on additional work. If you are too tired, it's a good idea to give yourself time to rest.

3. Do not diversify

The freedom to set your own schedule makes freelancing a comfortable job for many people, but it can be dangerous. In many cases, freelancers are so dependent on clients that they tend to experience financial difficulties when the project is over.

In the meantime, you want to make sure that your income and savings are sufficient to meet your current needs. In order to avoid unwanted things, diversify projects, clients and portfolios. Its purpose is to protect you when you lose a project, a client, or there is a significant change in the industry.

4. Not counting taxes

When hiring freelancers, clients often forget about taxes. Instead of saving, this habit also makes it difficult for freelancers. Lack of planning can result in financial pressures that encourage you to take other jobs.

Therefore, put money aside every two weeks so there will be enough to pay your taxes when they are due. In addition, make sure that the value of the project paid has been deducted by tax so that you receive a nominal net payment.

5. Accept all incoming offers

Freelance offers are tempting, especially if they come from friends or big brands, it can be hard to turn them down. However, be aware that not all jobs and projects match your experience, interests, and abilities.

Don't take on more work than you are used to. If this happens, work will actually give you stress, making it more difficult to complete work and even risking your career.

Your ability to handle work three months ago, may not be the same today. This is very natural and there is no need to feel guilty or disappointed. Measuring self-ability will also be useful for maintaining health and avoiding additional expenses when sick.

Even though it can add to your income, making your freelance decision must still consider personal finances. Instead of getting profits, don't let you only lose. Therefore, deciding to work as a freelancer must also be accompanied by self-awareness.