Whether you are just starting in your career or have been in the working world for a while now, it is never too early to start thinking about your finances and the future. Though retirement may seem extremely far in the future, financial planning allows you to begin making better financial decisions before it gets to be too late. According to the National Institute on Retirement Security, nearly 45% of households do not own any retirement account assets. For freelancers especially, it is important to ensure that you have a steady source of income and so you’re prepared for healthcare costs, emergencies, and saving for a home, and so you’re not included in the 45% not prepared for retirement.
1. Set goals & Stick To Them
It may be difficult to focus on the future when you want to spend your hard-earned money as it is deposited into your account, especially if you’re working as a freelancer or are between jobs and paychecks aren’t very consistent. If you set financial goals and keep them in mind, it is easier to get motivated to save. If you set goals for your savings, you can also set up rewards for yourself, like splurging on dinner at the new restaurant in town or making the purchase you have been waiting months for. It all comes down to planning and scheduling, so while you are working hard, be sure to reward yourself for hitting your savings goals.
2. Utilize apps
With today’s technology, apps can do the heavy lifting when it comes to automating savings and cashflows. Make sure your notifications are turned on – as annoying as these can be, they come in handy if there are any hidden fees or charges placed on your account! Apps like Mint, Mobills, Monefy, and Wally are also great for automatically depositing money into your savings account and letting you know when you get too close to your set budget in specific categories.
3. Get organized & Stay That Way
Know when all of your bills are due and sign up for autopayments where you can! Most companies now offer a discount when customers go paperless or enroll in autopayment plans, so save where you can. Whether you choose to go through an app or stick with a classic excel spreadsheet, find a method that works for you and with your schedule so that you can stay on top of your finances and not lose track of your spending habits.A detailed system can also help you to stay on top of what projects were completed and are still pending payment. As a freelancer, detailed records make it much easier to keep track of everything and they come in handy when it’s time to pay taxes.
As previously mentioned, apps can help you create and maintain budgets, whether they be specific categories or spending overall. By tracking your spending, you will quickly notice your spending habits, and with a budget in place you will be able to match up your income to what you are spending. Most credit cards now let you analyze your spending to see where most of your money is going (ie: entertainment, transportation, food etc.). Whether you have a steady income or are working freelance and picking up gigs here and there, this will better assist you in creating functional budgets.
5. Start saving
Even if you only start with one dollar a day, at the end of the year you will still have $365 more saved than had you not saved anything. Some apps, including Digit, Chime, and Acorns, will automatically deposit a set amount into your savings account or investments. You can also set aside a set dollar amount, like a budget, that you will automatically transfer into your savings account. Regardless of the amount or way in which you save, it is extremely important to start saving with the future in mind. This could include exploring your company’s 401k programs with matching options, contacting your bank to see if you can speak with someone regarding setting up the right account for you or even consulting a Financial Planner. Another helpful savings trick is to save for specific trips or occasions, as well as an emergency fund to always fall back on.
What are your financial tips and tricks? If you’re interested in making additional money to deposit into your savings account, check out our Freelance roles here!