When you’re a freelancer, sometimes it can feel like managing your quarterly taxes takes your attention away from other financial decisions that matter. Of course, as an indy, you don’t have an employer to take on a portion of your health insurance payments and retirement savings. Come to think of it, you’re the only person in charge of every investment that affects the course of your career. When it comes to freelance saving and investing, consider prioritizing the following four areas.
1. Paying Off Your Debts
If there’s one thing all freelancers need to come to terms with, it’s inconsistent income and unexpected budget costs. Add in a little debt to the equation, and it can be a recipe for financial disaster.
Of course, you’ve got a lot on your plate right now. But striving to become debt-free is an important investment to make in the early stages of your career. In fact, talk with any financial expert and they’ll encourage you to pay down as much debt as possible before you quit your 9-to-5 to go freelance.
You may be thinking: “Why, exactly, should I pay down all my debt now?” Well, not only will it add some financial stability to the unpredictable indy lifestyle, but you’ll be able to take more risks to further your freelance career. Once you get that debt paid down, there’s less pressure to accept each and every job that comes your way — no matter the rate and quality of the project. Now, you can be a bit choosier with who you work with and what you work on. And nothing grows the career you want better than working with the right people and building a portfolio you love.
2. Learning New Skills
Learning a new skill or two is a great way to set yourself apart on your freelance website or resume. If you’re a designer or photographer, for example, continuing to practice your craft and advance your abilities is an ongoing factor of success. Designers, consider learning how to use new software like the Adobe Creative Cloud, and photographers, add a new lens to your inventory and master it. The options you have to improve what you offer to clients are limitless.
There’s plenty of evidence out there that investing in experiences — not material goods — gives individuals more satisfaction after a purchase. Building on your skills and learning new ones over the course of your career helps you rise to the next level. You’ll be able to set yourself apart from the competition and give yourself a raise by charging clients a higher rate.
3. Saving for Retirement
You may be well-aware that you need to set aside money for the freelance taxes you owe each quarter. But have you made saving for your future a priority, too? If not, set yourself up for success by automating this process. Doing so can remove the hesitation — or sheer forgetfulness — that comes with putting money away long-term. Set up automatic savings transfers weekly or monthly from your checking account to savings, then sit back and watch it grow. Or create an automatic savings transfer into your IRA or Solo 401k.
If you don’t have much to spare right now, don’t worry. You can start small and incrementally increase the size of your transfers over time. Soon enough, you’ll be able to save money for emergencies and retirement without even thinking.
4. Working With Experts
When it comes to your business, it pays to invest in the resources of professionals who can keep you on the right track. For example, a good tax advisor can point out unknown freelance tax deductions and big savings. And the right insurance agent can make sure you have the right health and life insurance coverage so you’re not under-protected or overpaying. Work with any one of them and you’ll quickly discover: Having an expert on your side can be an invaluable asset and a worthwhile investment.
If you’re just starting out, you may not have every answer about where you want your freelance career to take you just yet. But with a little bit of guidance from the experts, you can discover the right path for you. As you continue to make smart investments in your career, you’ll start to see a return — whether it’s in the form of financial security, a higher income or peace of mind.
As you determine your own savings plan, it’s crucial to consider how you can best invest in your future and the goals you’ve set for your freelance business. Of course, setting aside money for your quarterly tax payments is vital, but there are a variety of other financial matters and investment areas to prioritize, as well. When it comes to saving and investing, do you have the right plan in place?