Freelancing has its perks but the inconsistent income can often be seen as a benefit and a drawback. On one hand, you have the chance to earn as much as you want, but you can also earn very little if you have a low rate, clients don’t pay you on time, or if you have to take multiple days off throughout the month.
It’s no secret that freelancers are responsible for a wide variety of extra expenses like insurance, retirement, operating costs, etc. As a result, being able to save more money is a must.
Here are three ways freelancers can save more money.
1. Start Using a Zero-Sum Budget
Adopting a zero-sum budget is easy and will ensure that every dollar you earn gets put to good use. Unexpected expenses are bound to pop up during the month so you can create a category in your budget to cover them.
In addition to all your normal expenses, assign a fixed amount to go toward saving and unexpected small costs that you won’t need to rely on your emergency savings for.
For example, if you earn around $4,000 per month after taxes and your regular expenses are only around $3,500, instead of letting any extra money sit in your checking account, transfer it to savings instead so all your earnings are being sent used somewhere each month.
2. Automate Your Savings
If you’re already paying yourself first and still not able to save as much money as you’d like to look into using other automated savings programs like Digit.
Digit is a free platform that connects to your checking account. It studies your spending habits and makes automatic transfers from checking to saving on your behalf.
Digit takes care of all the hard work for you and sometimes the withdrawals are so small you might not even notice them. Think about how many times you pick up a $4 coffee or spend an extra $10 at the store.
Saving with Digit can help put your spare change to good use. You can always transfer the money that Digit saves for you back to your checking account if you need it.
3. Save the Difference From Your Rate Increase
If you really can’t afford to cover all your expenses and set aside the amount of money you need to save to meet your goals, it’s probably time to request a rate increase with your clients.
If you’ve been working with a client for a certain amount of time and your performance has helped you prove yourself, there’s no harm in asking for a raise because the worst they can say is no.
Even if your rate only goes up a few dollars per hour or project, you can keep living at your current standards and save the difference each month. Trust me, it will add up.
Summary: Make These Saving Strategies a Habit
If you feel like you’ve tried traditional methods of saving to no avail, consider these three options. Get into the habit of lowering expenses and earning money so that you always have a surplus. In this way you can save consistently each month.