I was just a few months into my freelance career when my laptop started dying. The mouse pad barely worked, the hard drive was full and it was so slow — as in, several-minutes-to-open-a-new-browser-tab slow.
I shouldn’t have been surprised at its decline. My laptop was several years old, and I was using it more than ever before. But, frankly, the thought of replacing it hadn’t even crossed my mind, and I wasn’t budgeting for the cumbersome expense of a new laptop.
Moral of the story? As you start, grow and expand your freelance business, you should be budgeting for supplies — not just the big ones like dying laptops, but the smaller ones like office materials, marketing essentials, software and website tools, too. If you’re not currently budgeting for these items, here are some ways to get started today so you aren’t caught off guard like I was.
Pens, Paper and Ink: Oh My!
Everyday freelancing supplies are easier to budget for. Why? For one, they’re typically less pricey. And two, you can often incorporate these expenses into your rates.
It’s worth noting that the costs of supplies will inevitably vary based on your industry. For example, I don’t need a lot of supplies as a freelance writer — maybe a pack of printer paper or a notebook once every few months. But if you’re an artist, you’ll be investing in supplies more regularly, and you’ll need to budget more carefully.
Don’t Forget the Digital Supplies
Everyday supplies can go beyond traditional office materials, especially in today’s digital world. We’re not just working with paper and pens here; we’re using InDesign, DropBox and Harvest. Do you use accounting software, like Quickbooks? Pay for website hosting or Google Analytics to track your site’s traffic? How about an email marketing program, like Mailchimp? These are essentials for many creative freelancers, and sometimes the free versions just don’t cut it. When you need your programs and software to be on the next level, don’t forget to include these costs in your budget.
Create a Supply Budget
How do you calculate how much money to set aside? Most budget items are based on a percentage of your income, but there’s no hard-and-fast rule when it comes to income and supplies. You’ll need to break out a calculator for this one.
Review your expenses from previous months to figure out how much you typically shell out for supplies. You might even want to revisit your tax deductions from the previous year to see how much you spend annually on these materials. Since you’re the only one purchasing these supplies, it should be a straightforward calculation, and you can start setting designated funds aside.
Not great with budgeting? There are a number of helpful money-management apps that can help you keep your business on track.
Get Payment Where Payment Is Due
As I mentioned before, you should be incorporating the cost of supplies into your rates where it makes sense. If you print out pamphlets for a consulting presentation, the cost of the paper and ink should be included in your payment. If I ever need to purchase stock photos for a project, you bet I work the cost into my rate.
You might think, “It’s only $10. I can shoulder that.” Look at it this way, though: If you do 20 similar projects and incur similar supply costs, you’ll quickly be out $200 before you know it. As long as you’re delivering quality work, most clients won’t balk at an additional $10.
Get Crafty to Save on Supplies
If you do the math and realize you’re spending a lot on supplies, consider using this as an opportunity to reduce your expenses. Start by weeding out software and supplies you don’t use. In the world of automatic payments, it’s easy to forget you’re paying for a budgeting app you haven’t opened in weeks.
Next, brainstorm ways to reduce costs on supplies you truly need. If you regularly buy markers, go to a wholesale club and purchase them in bulk. If you know you’re going to stay with your current web host, see if there’s a discount for paying a lump sum instead of monthly installations. If you burn through notebooks like crazy, consider investing in digital note-taking software (or even using a free one, like Evernote).
Even if you save a few dollars here and there, it’ll add up quickly — saving you hundreds in the long run.
Protect Your Wallet From Unexpected Expenses
Of course, you will need to plan for dying laptop–type situations. Personally, I sucked it up, charged the new laptop to my credit card and took on extra work to pay it off before interest got out of hand. However, if you’re strategic about budgeting for supplies, you can handle unexpected expenses more gracefully than I did.
The best way to plan for the unpredictable is to take your business’s emergency fund seriously. When business is booming, put a little extra into that separate account. Aim to have three month’s worth of living expenses in there at all times, and then when you need a new printer, computer or phone, you can pay for it in cash — no need to incur debt or pull your hair out. Trust me, it’s a lesson I learned the hard way.