One of the greatest gifts that my freelance career has given me is the gift of sorting out my finances. I learned very quickly that if I wanted to run a successful business and pay my bills on time, that I would have to pay close attention to my money.
The cool part is that freelancing hasn’t just helped me sort out my business finances, it’s also forced me to sort out my personal finances. As you may remember from my previous posts, we’re dealing with two different budgets here. I’ve not only increased my revenue and income, I’ve also increased my savings and doubled my net worth in a year.
It’s not just me either. Many of my colleagues ended up freelancing to pay off their student loans, build multiple streams of income and even get themselves out of consumer debt. The reality is the very nature of freelancing will force you to look at your money and start sorting out your finances. Here’s how.
Freelancing will help you overcome your fear of numbers.
I used to hate money because I hated math. I would avoid it at all costs, turn a blind eye, spend whatever I made and pull from whatever small savings I had all the time.
Fortunately, freelancing has gotten me more comfortable with numbers because I haven’t had a choice. I knew I wanted to build a successful business, but that would require me to sit down and deal with my arch nemesis – math. In my case, my desire to make money on my own terms was stronger than my fear of numbers.
What I discovered is that budgeting, income and debt is really very basic. I’m not measuring the circumference of anything, I’m not trying to use some complicated formula and I can just use the basic calculator on my iPhone to figure stuff out.
Freelancing will teach you how to budget.
Not only will freelancing teach you how to budget, freelancing will teach you how to budget when nothing is figured out for you. Taxes are on you, health insurance is on you, retirement is on you and just about everything you can think of is on you.
At first glance this seems awful. But, the reality is if you’re forced to deal with something yourself you’re more likely to understand it. Again, because you have no choice. I now have regularly employed friends coming to me to explain health insurance and retirement options, simply because I’ve had to figure it out for myself.
Freelancing will teach you to save – a lot.
At some point, every freelancer knows that they must save money like a squirrel socks away nuts for the winter. The very nature of running a business means you could have an awesome month in January and then a terrible month in February.
Granted, there are ways to even out your irregular income and budget based on the average amount, but you learn pretty quickly that you need to have extra insurance in the form of liquid savings.
Freelancing will change the way you think about money – forever.
The true gift freelancing has given me is that it’s taught me to change the way I think about money for good. I now understand I can make whatever kind of money I want. This concept was foreign to me five years ago when I was looking for a job during the aftermath of The Great Recession and finally understanding it has changed my entire life.
Your best asset is your earning potential, and freelancing has taught me that my earning potential is unlimited.