I have a thing for cool old cars. Over the years, I’ve had a ’68 Mustang, a ’71 Volvo P1800, a ’63 Mercury Monterey — the list goes on and on. However, because I don’t come from old money (or any money, for that matter), these cars have been my daily drivers, not my Sunday polish. And because I’m much better with a wax job than a valve job, I’ve had to pay mechanics to keep those babies breathing. Talk about unexpected expenses.
But you see, by owning such cars, I invited the unexpected expenses — and after you’ve owned a few dollar-sucking chariots, those costs are no longer unexpected. They’re a matter of course. As a freelancer, it can feel like a disaster is always ready to angle a sharp corner at you no matter how careful you are, or how sensible a car you drive. And not to be a monger of anxiety-inducing fears, but the disasters are out there, sharpening their teeth.
However, the savvy freelancer has the rubbery bones necessary to rebound from dark fates. We’ll get into some preventive measures that can put up an unassailable wall between you and economic earthquakes, but let’s first talk about what to do if the earthquake has already hit and your wall is cracked wide open. Unprepared freelancer, meet unexpected expenses.
Sell Your Stuff, Not Your Soul
As U.S. News and World Report suggests, your first thought might be to sell your stuff. I’ve sold many old electronics on eBay — things that have been replaced or set aside. Who knows? Some of grandma’s antique tableware in the attic might be worth a fortune. They also suggest you might go to the extremes of selling your car, but damn.
Here’s an interesting question from EveryDollar.com: Is it an emergency, or is it just a surprise? They can be dealt with differently. A medical emergency is just that — you must care for your health or the health of your family, with expense concerns secondary. Make sure you do have health insurance, first and foremost.
But what if the “emergency” is equipment or household things that can be fixed later, on a temporary basis or ignored until the proper time? You do remember that “ignorance is bliss” adage, right?
Staying Ahead of Expense Evils
Instead of talking about reacting, let’s discuss not getting yourself into that pickle in the first place. Tech tools are everywhere — use them to shore up your sagging finances. First, know how many dollars are going in and out. We know that freelancing income is often staggered, but it’s helpful to have a general sense of your income and expenses. Use a simple spreadsheet and expense tracker, and keep your business and personal expenses separate.
I’d never say don’t have fun, but you don’t have to have the kind of fun that puts you in the cash cellar. A few thoughts:
- Don’t use your credit card blindly. You will have to pay for that ski trip to St. Moritz, even if that plastic seems like travel magic now.
- Maybe you could eat at home more often, and lay off the Chateaubriand in the fancy restaurants.
- You might be able to get something done — say, fix the broken door lock — by bartering your skills with another skilled soul.
- It might seem impossible at the moment, but start an emergency fund. The drip, drip, drip method of adding small increments can build up to a full pool.
- You really do need to have a solid understanding about taxes, home office deductions, business mileage and all that blather if you’re going to last as a freelancer.
And don’t forget to get creative: maybe there’s a spare bedroom that could be easily transformed into a temporary Airbnb. You might have to do more laundry, but it all comes out in the wash (I don’t think that cliché has much to do with saving money, but it sounded good at the time).
By the way, the car I’m driving now: a funky Toyota Corolla. The nuclear costs of fixing the suspension on a nice old BMW I recently had were unexpected expenses indeed. But I’ll take my own advice above and get back in the race. Surely there’s a ’59 Caddy waiting for me…