Some years ago, I had an accident, and my car got totaled. This was depressing because I had to spend a lot (my total savings) to fix my vehicle. You can tell that I wasn’t fully prepared for this kind of emergency. Besides, this was a wake-up call for me to start my journey to financial freedom. I won’t be caught unprepared next time.
It is easy to get caught up in the present, thus neglecting plans for the future. Are you an up and coming freelancer without a defined plan to financial freedom? Can you buy what you want when you want without breaking the bank?
Statistics show that the number of freelancers available on different job markets increases yearly at an exponential rate. An average freelancer earns 17% more than a traditional salary earner. As a matter of fact, freelancers contributed almost $1 trillion to the US economy in 2019. Asides that, 31% of freelancers earn above $75,000 yearly. Impressive right?
Despite the large amount of money earned by freelancers, less than half of them have a defined plan for financial freedom, and a higher percentage have no investments.
What does financial freedom mean?
Financial freedom is having enough residual income to cover your living expense without putting a strain on my savings. In addition to this, it gives you the ability to buy whatever you want.
How does one attain financial freedom as a freelancer?
It is crucial to strive for financial freedom. Hence, I have made a detailed list of several financial tips that would help you accumulate wealth. Some of them are listed below
- Tracking your income
- Saving for retirement
- Personal investment
- Frugal spending
Working as a freelancer has both positives and negatives. You get to handle your personal finance, all the earning accrued automatically come to you. Nothing beats being your own boss, right?
However, it has some disadvantages too. Corporate organizations have a support system in place for their employees, such as health insurance and retirement plans. As a freelancer, you are obliged to fund these services by yourself.
You have to be disciplined enough to manage your income, provide for these special services, and save up for retirements. Doing this would guarantee a level of financial freedom for you in the long run.
Tracking your income
I’m the kind of guy that loses track of his expense. Yeah, the funny thing is that I’m not alone.
Personally, I suggest you have separate accounts- a business and personal bank account. This would ensure that you don’t mistakenly spend out of your savings.
Keep everything organized. Importantly, take note of all your earnings so that you don’t overstate or understate your income. Doing so would put you in trouble with the IRS.
Saving for retirement
Nobody wants to be broke and old. Having a retirement plan is an integral part of financial freedom. As a freelancer, you have to fund your retirement plan by yourself. Asides that, there are several pension plans you could subscribe for, such as the traditional IRA, SEP-IRA, and solo 401(k)
It might be a good idea to seek the services of a financial advisor.
Invest in yourself! I consider this the most important advice of all. What better way to spend your money than to invest in yourself? Take professional courses to improve your skills. This would increase your chances of landing better jobs, which translates to more money for you. Spend on investments. If you are the business savvy type, it might be wise to invest your earnings in business to generate profits.
Never spend your money before you have it. Most self-made millionaires are frugal. It might be surprising, but they are careful with every dollar.
Adopt the saving attitude of these successful men and cut down on extravagant spending. Reducing unnecessary spending would ease the pressure on your bank account and free up funds that can be saved.
They say money doesn’t buy happiness. However, money is essential for happiness. Financial freedom provides financial security and rest of mind.
About Ayorinde Okikijesu Elizabeth
Ayorinde is a freelance content writer on Upwork with topnotch experience in crafting SEO-rich content. She also belongs to a pool of writers, showcasing their skills via a clearvoice.com. Ayorinde believes in helping her clients achieve note-worthy results for their business through my writing. You can follow Ayorinde on Twitter and visit her website.