A lot of people go into freelancing as a way to make extra money outside of their day jobs. For some, freelancing turns into a full-time gig. With time, you go from breaking even to starting to stabilize your income as a freelancer. In some instances, like during especially busy months, you may find yourself making a lot of extra money as a freelancer.
In this article, I’m going to detail some of the things you can do when you start making extra money as a freelancer. The key here is to be smart about the extra money. You are in a position many people are not in – you decide how much you can make – so it’s also up to you to decide to use the money wisely.
Tip #1: Save, save, save.
The first thing you’ll want to do when you start making extra money as a freelancer is to save some of those coins. It’s always a good idea to set money aside for emergencies and lean months.
To give you an idea of how important this is, recent reports have found that nearly half of Americans don’t have enough in emergency savings to cover a car repair or co-payment for an emergency room visit. Emergencies aren’t a matter of if, they are a matter of when – so it’s in your best interest to save.
Additionally, lean months are also a matter of when. Maybe you get sick and can’t work as much (been there). Maybe you want to take a vacation. Whatever the case may be, it’s always helpful to put money into your savings buffer.
Tip #2: Reinvest some of it back into the business.
Whenever I make extra money as a freelancer I take a look at some of the areas where I’d live to invest in my business but didn’t previously have the funds to do so. This currently looks like social media engagement and re-hiring my web designer to spruce up a membership site I’ve been testing for a couple of years.
Within a month’s time, we’ve gotten 1,000 new Facebook fans. We’ve also more than doubled Twitter and Instagram followers. All of this was done thanks to some of the extra money I’ve made as a freelancer that I decided to throw back into the business.
I also decided to replace my six-year-old Macbook. When you make extra money as a freelancer it may be a great time to look at your gear and see if you need an upgrade.
Tip #3: Boost your retirement savings.
I’m very excited that 2016 has been the year when I can finally make more than the minimum monthly contribution to my IRA. In six months I’ve already managed to surpass the total amount of money I’ve contributed each year since opening my account.
Retirement may seem like it’s eons away, but it’s important to throw some of that extra money into that account so that your future self doesn’t become stressed about money.
Tip #4: Spend some of it.
I’m not one of those personal finance bloggers who is very strict when it comes to money. I make sure to balance out my budget by allowing myself some wiggle room when I make extra money as a freelancer.
This means that after I’ve decided to save and invest, I give myself the space to buy something – like my favorite liquid lipsticks that sell-out like hot cakes or a necklace I’ve been eyeing for a year.
I’ve found that it’s not just important to handle our financial responsibilities, but to have some fun as well. After all, you’ve worked hard for that extra money and you deserve to enjoy some of it.