Finding new, creative ways to increase savings: It’s a goal every freelancer has at one time or another.
Whether you’re looking to build an emergency fund, save for the future or create a financial cushion that will let you write your book or develop a gallery collection, a bigger savings account means more financial freedom. Yet, finding room in your budget or strategically increasing your income to save can prove challenging.
Here are seven strategies that can help you increase your savings as a freelancer:
1. Find One Thing You Can Cut
Cut your expenses, and increase your savings. It’s the least exciting advice anyone has ever given me, and yet, there’s a reason you hear it again and again. When an indulgence becomes a regular expense or you find you’re paying for something you don’t really use, redirecting that money to savings provides the boost of an immediate win.
For example, I kept a premium LinkedIn account because I thought I needed one, but I didn’t really use the features. That daily $5 coffee seriously adds up, too, to the tune of $1,200 per year. Between the two, I was able to increase my yearly savings by $2,000. Small changes can be significant.
2. Take on a Job With the Sole Goal to Save
A client once approached me about a project I wasn’t totally psyched about. It didn’t fully align with my interests or career goals. However, it was certainly within the wheelhouse of something I could do, and the fees were stellar.
With no plans for that money other than to boost my savings, I could hold back the taxes and put the difference (hundreds per month) directly into my account. Working a little harder, even for a set period of time until you reach a target goal, can help you quickly boost your savings.
3. Treat Savings as a Destination for Your Money, Not What Happens to Leftover Cash
You’ve probably heard the phrase, “Pay yourself first.” As a freelancer, it can be hard to do that when you’re thinking about paying Uncle Sam his taxes first, catching up on your bills and more.
However, if savings is what you do with “leftover” money, you might be tempted to spend it on things like lunches out, new clothes or a gift for your partner before it ever makes it into your savings account. Instead, determine what percentage of your income you’re going to save and automate the process — by transferring a percent of each payment you receive directly to your account — before you do anything else.
4. Create a Challenge
Sometimes, increasing your savings is about wanting to hit a certain target, like doubling your savings for a specific goal or just reaching a number in the bank so you can breathe easier. The headlines are full of people who get radical about their spending and don’t buy anything for a year. That’s a little too extreme for me, but I’ve done “eat your lunch at home every day for a month” challenges, which can help net a couple hundred dollars in extra savings.
Depending on your lifestyle and how experimental you’re willing to get, you can save a significant amount of money. Consider using your experience to fuel a creative project, such as a personal finance essay, and you could net a few hundred more for your savings account.
5. Seek Less Expensive Alternatives to Your Favorite Things
If you know me well, you know my secret: I love diet soda, preferably loaded with ice and straight out of a fountain. However, $2 every time I want the fizzy stuff isn’t a great use of money. A friend gave me a SodaStream, and I get the same effect at home for a fraction of the price.
My husband and I also love to dine out. Exploring places on Restaurant.com or Groupon takes us out of our comfort zone and slashes the cost of dining out. Saving money isn’t always about deprivation; it’s just a matter of finding less expensive alternatives.
6. Use Cash
Another strategy that helps me cut spending is using cash. Depending on what’s happening in a given week, I set a budget and visit the ATM on Monday morning. Using credit cards or bank cards is possible, but I view at it as a major violation and look to use them for emergencies only (a hard-won lesson).
When the cash runs out, so do I. It keeps my spending visible in a way that credit cards and regularly tracking balances didn’t. It also keeps me honest to my spending and savings goals, while still allowing for the extras and unexpected little expenses that come up during the week.
7. Reward Yourself
I know it sounds counterintuitive to tell you to spend money to save money, but hear me out. As freelancers, there’s sometimes the feeling that you’re already giving up certain things for more creative freedom and being your own boss. When that feeling of deprivation becomes apparent in other parts of your life, it’s natural to push back.
Think of the dieting analogy: I can consistently hit my goal of 50 carbs a day (or less) for weeks, but if I hate it, one day I’m going to lose self-control and demolish the nearest bread basket single-handedly. Instead, a single “eat whatever you want” meal keeps me on track. The same is true of finances. Saving is great; going without everything is taxing. A special night out, permission to spend $100 at Target or whatever it is that gets you excited can prevent a massive spending spree you later regret.
Increasing your savings early in your career can take the stress off your freelance efforts and give you more freedom farther down the line. Take the time to look at your budget and spending, and design a savings plans that’s custom-fitted to your needs.