Financial Matters: Moving from a Steady Job to Freelancing

financial matters
financial matters

by Mark Thomasson |

In this day and age, migrations and migrants are one of the burning issues on a global scale. While we‘re witnessing a major political turmoil caused by this topic, we won’t discuss those affairs here. What we’re interested in here are economic migrations from a safe work environment to an uncertain career of a freelancer. Since millions of workers are launching online careers, many of them also decide to quit their steady jobs and become freelancers. Here are some major financial considerations that should precede that move.

Handle a two-job approach

While it’s understandable that a mundane 9-5 job can drain all your energy and mental strength, you shouldn’t leave it if you don’t have another ace up your sleeve. For starters, that smartest thing a dissatisfied corporate worker can do is start freelancing in their free time. It will be a big step with numerous challenges, but you need to know that leaving your comfort zone is a must-do if you want to become an independent professional.

The biggest problem for people who have been with the same employer for years is that they don’t know how to offer their services on the modern workforce market. However, due to a large number of online platforms for freelancers, this problem can be easily overcome. What you should do is set a number of hours that you’ll spend looking for a side job weekly. The key feature here is to start getting projects, so as to build your portfolio. Finally, every single cent you earn that way should be put aside. If you plan it in a clever way and play your cards smartly, this additional job will be the driving force behind your savings fund.

Collect savings for the transfer

Staying without a steady income might come as a bit of a shock for people who have been employed for a longer period of time. This feeling will be even stronger for employees who have families. This is why moving from a secure environment to freelancing should be preceded by a detailed plan. In line with that, it’s imperative for every potential freelancer to determine their own saving policy. On the one hand, finding an extra job is a great solution. And if you land it in the field of work you’d like to transfer to, it will be a real cakewalk for you.

On the other, you might introduce some austerity measures on your expenditure and save assets from your regular salary. Here’s where you could make great use of some budget-tracking apps. They will help you visualize your expenses, as well as analyze the spent money at the end of every month.

As for the amount of money you should save before you farewell your old job, it’s an individual subject. For instance, ifyou already havea few regular clients that bring an income sufficient for covering all your monthly expenses, you don’t need to ample a cushion. In that case, you could save a three-month salary and you can set off for your individual business quest.

Nevertheless, if you still don’t have a continuous inflow of new projects, postpone your resignation until you save enough assets to survive without a job for six months.

Ensure several income streams

Now that you’ve managed to leave your old job, at first you’ll be delighted with the fact that you’re a free person. This is a period in which you will have a lot of enthusiasm and inspiration for new ideas. And then, as new clients keep rolling in and you get overloaded with new projects, you’ll find yourself in a position similar to having a 9-5 job, only without a regular payment. Also, what sometimes happens to people who have had the same work place for years is that they need something tangible to rely on. Such freelancers often stick to one or two clients and don’t explore any new territories. This is a serious trap that you need to avoid. The essence of being a freelancer is doing your job the way you want it. Therefore, you should ensure collaboration with a multitude of different clients. On the one hand, that will give you better chances to develop your skills. On the other, working with a variety of clients will ensure several sources of income. This advantage makes a huge difference for your freelancing career. So, if you feel that your old clients have become unbearable, don’t waste your time with them but keep acquiring new ones.

Dealing with the revenue

The way you deal with your revenue will be much different from the habits you had once you were a sheer employee. What you know for sure is that there’s no guaranteed payment at the beginning of the month. Since everything now depends on your personal initiative and commitment to work, it’s essential to manage your cash inflow in a disciplined and rational way. For instance, you should pay yourself a salary instead of using your business assets as your personal money.

Moreover, being a lone wolf in a competitive business environment is no bed of roses, which is why you need to hone your predatory skills. This mainly refers to negotiating your rates and conditions under which you work. That way, insisting on getting partly paid in advance is a smart way to avoid being tricked. This is why you should always have a reliable invoice software tool at a click of your mouse. When your clients are immediately given all the information necessary to make the payment, they’ll have less maneuver room for evading their obligations.

The same tactic should be applied when it comes to your debtors. Freelancers already have a lot on their plate and the last thing they need is not being paid for their work. Every skipped payment puts your career and existence at risk, so here you have to be as resolute and strict as it gets.

Replacing a safe but stale position in a company with a freelancing career is the move of a lifetime. But if you want to pursue your professional dreams, be prepared for various challenges and obstacles thatyou’ll come across. Nevertheless, your financial stability needs to be your top priority throughout your freelancing work period. The matters discussed in this piece should help you become a distinguished freelancer in your niche.

AuthorBio: Mark is a biz-dev hero at Invoicebus – a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.

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