How Do Self-Employed Professionals Manage Their Budget?

self employed woman managing her budget on a notepad

The decision to start an independent career might feel liberating, at first, but it’s a challenging and tricky path. As a self-employed professional, you need to be aware of your financial limitations. Indeed, while a business can provide their employees with the appropriate equipment, management, and budget, an independent individual will need to make every activity and process fit within a single budget. Unless you’ve recently won the lottery, it’s fair to say that your freelancing budget is going to be tight. Ultimately, it’s a delicate balancing act to be able to keep your solo venture afloat when every penny counts. But difficult doesn’t mean impossible. Successful self-employed experts share the most critical lesson in the trade: how to do more with (an awful lot) less. 

They plan ahead
When you are employed in a company, the last thing you need to worry about is your taxes and your pension. Typically, they fall under the responsibility of your employer – and you can discuss with the relevant interlocutor how to maximise your pension funds, for instance. But when you’re your own boss, unfortunately, you need to take care of your taxes and pension by yourself. One golden rule to remember: Start planning as early as possible. Don’t wait until the last minute to sort things out. Thankfully, you can plenty of dedicated online tools and agents to help you make the most of your time while your finances are getting sorted. 

They consider discounted offers for their equipment 
When there’s nobody to buy you the equipment you need, you have to be smart and find the best options available. Sole-traders tend to throw mobile phone deals into the mix so that they can secure a discounted business number – ensuring they can separate work from pleasure. When it comes to affordable laptops and computers, you’ll be pleased to know that retailers such as Amazon have attractive refurbished prices on items that come with a warranty! 

They keep a strict marketing budget 
You can’t make a living if nobody knows about your business. Unfortunately, marketing costs can get expensive when you’re trying to pierce on the market. However, some marketing activities can be highly effective even on a tight budget, such as Google AdWords campaigns. Indeed, AdWords puts you in charge of your budget so that you can decide exactly how much you want to spend every period. Additionally, making the most of your keywords ad groups can ensure tight tailoring, meaning that you only pay for the people who really care about your ad. 

They set appropriate hourly rates 
With a variety of freelancing platforms online, it can be difficult for a newcomer to figure out the best hourly rate for their work. Indeed when you can find freelancers ready to charge as little as £5 per project, you might be tempted to bring your fees down. But the best way to figure out your rates is to consider your experience and the typical salary you’d make if you were employed. Admittedly, you need to deliver high-quality results if you want to justify high rates, but pay should never be a taboo subject when it’s your income! 

Self-employed professionals understand the importance of keeping their finance matters as clear as possible, whether they’re managing taxes or acquiring equipment. There’s no secret; if you want to be your own boss, you need to learn how to make the most of your budget.

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