Freelancing is an awesome way to give yourself flexibility in a tough job market. It’s also financially unpredictable. Give yourself a “hibernation” fund to make it through the rough months.
Photo by Bryan Garnett-Law.
As personal finance blog Rags to Reasonable points out, one of the biggest downsides to freelancing is that you might go weeks or months without big clients. This isn’t the end of your career, but it does mean you need to prepare. By planning ahead and giving yourself a hibernation fund, you can weather the metaphorical winter:
Your first priority as a variable income earner who’s making some sweet cash, is to save up enough to get you through those lean times. Remember … hungry artists don’t think about art… they think about sandwiches.
That’s hard to do when you bring in big, lump sum paychecks. It’s tempting to view it all as disposable income. However, being a freelancer is a lot more like running a business than being an employee. That big check is to keep your company alive. Not to be your personal paycheck.
Lessons From Da Bears: Masters Of Variable Income [Rags to Reasonable via Rockstar Finance]
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