Budgeting is not the dirty word you think it is. When you\u2019re living on an inconsistent income typical of freelance or self-employed careers, it becomes the make-or-break tool for coming out ahead at the end of the year.<\/p>\n
As veteran freelancers can tell you, it takes time to create a financial system that can keep your checking account steady amid fluctuating contracts and unique tax situations. To do that, you\u2019ll need to budget wisely, pay your quarterly taxes each month, and seek out clients and gigs that have the potential to create steady income.<\/p>\n
If you find yourself in the early stages of your self-employed career, income tends to be more of an erratic, occasional thunderstorm rather than a steady soak.<\/p>\n
Take a few hours to review your spending habits and set a hard budget that allots enough money in all the important categories without allowing unnecessary spending. Add up your per-category totals: Is your modest budget possible on your fluctuating income? Do you need to be intentional about winning more gigs in order to maintain a reasonable standard of living?<\/p>\n
This type of financial audit can bring up some uncomfortable decisions, but remember\u2014these are only seasonal. As you create this budget, don\u2019t forget to include monthly tax payments.<\/p>\n
If do you use credit cards to help you get through the slow periods, be smart about it. Do your research and choose a credit card with a low APR and valuable perks like cash-back and rewards. And always pay off your balance as soon as you can.<\/p>\n
Quarterly taxes tend to be an annoyance to seasoned and new self-employed workers. Thankfully, taxpayers aren\u2019t limited to written checks anymore. The IRS\u2019 Payments page allows you to make estimated tax payments whenever you want.<\/p>\n
Take a few moments to review the previous year\u2019s tax return and calculate your tax rate. Use that as your guide for how much should be taken out of each month\u2019s earnings. Then, head to the IRS\u2019 website and make payments through their Payments page. The entire process takes less than five minutes.<\/p>\n
Paying taxes every three months is also a viable option, but doing so each month builds discipline and ensures that tax money isn\u2019t spent on other things.<\/p>\n
The most difficult thing you can experience as a freelancer or self-employed worker is the pain of losing a client that either has run out of money, isn\u2019t getting the results they want or closes their business altogether.<\/p>\n
Out of those frustrating moments, though, 1099 workers can discover that the crux of a self-employed or freelance career is the anchor client. There isn\u2019t a specific protocol or checklist to follow in order to identify these clients. It\u2019s more of an instinctual read\u2014learn about them over time and there should be a sense either way if the position is tenuous or solid.<\/p>\n
In the meantime, work hard to keep enough clients and one-time gigs to sustain an income that can meet your budget and, hopefully, exceed it enough to keep you out of debt.<\/p>\n
Each of these three facets of personal finance take more than intention\u2014they take hard work. If you don\u2019t already have one, creating a budget can be painful, but it\u2019s worth the short-term sting.<\/p>\n
Paying your taxes every month will take some getting used to, but the consistency keeps your finances steady and your taxes straight.<\/p>\n
Searching out reliable clients takes work, time, and instinct, but the rewards of a steady 30 to 40-hour contract are clear: a more stable budget and peace of mind.<\/p>\n","protected":false},"excerpt":{"rendered":"
Budgeting is not the dirty word you think it is. When you\u2019re living on an inconsistent income typical of freelance or self-employed careers, it becomes the make-or-break tool for coming out ahead at the end of the year. As veteran freelancers can tell you, it takes time to create a financial system that can keep […]<\/p>\n","protected":false},"author":418,"featured_media":16212,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,4783],"tags":[],"class_list":["post-16211","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","category-financial-education"],"acf":[],"yoast_head":"