Are you a Freelancer? Better Save that Money!

Where does my money go?  First thing when it comes to budgeting is figuring out where you spend your money in the first place.  I love eating out.  I love shopping for new clothes. I also spend money on Personal Training and I also collect Lucky Cats.  I mean really collect lucky cats, check out my instagram confirming my obsession. Then of course there's bills to pay and things that pop out of nowhere, like surgery.  I had a surgery I didn't plan for in 2020 and it turned out that my health cover, covered none of that putting me $5000 out of pocket. It was shocking to me, but you live and learn.  Lesson here people, double check your health cover and insurances.

As a freelancer/contractor,  money is not a regular thing.  Some months you could have back to back or even multiple jobs at the same time, other times there might be nothing at all. That's the downside being your own boss, having to constantly hustle, find and apply for jobs.  I try to have more than one income stream at any one time, normally by working on two different jobs when it's available.  I also try and have a passive income stream, it doesn't earn me a lot but it can at least pay for a nice lunch or dinner.  Any money is good money!  Unless obtained illegally, of course.

When I first started, I saved as much as I could. I mean, I just didn't know when my next gig would be coming from.  I was lucky that I had back to back work and extra work after hours, the more experience I got.  I also constantly applied for jobs and worked weekends to make it work, especially while I was trying to build a folio and gain more experience.  I would be careful doing this though, nothing worse than burning out. Anyway, I saved so that I at least had enough money to tie me over if I was out of work for a while and emergencies.  That's the thing about saving, you need to put away enough to live and then extra.

Another thing, being a freelancer normally means you're not under a PAYG, so you essentially have to pay your own taxes.  You need to make sure to put away enough for that.

This won't work for everybody but what I try and do is divide my pay checks by 3.  One for savings, one for taxes and the last one for fun.   It doesn't happen every pay check because life happens but I found that this works for me.  I had far less fun money in my first few years of freelance too and if I found myself in a position where I have a second job, sometimes I will put the whole pay check away, just in case am under for taxes and that has happened over the years.

I also save by putting away a small amount of money each week, regardless if I have a job or not.  This can work for everybody.  Even $5 a week will save you $1820 a year.  Doesn't sound like much but if $5 is all you can afford to put away a week, then it's still better than nothing.

Another thing to think about is Super.  Yeah, may not feel too important when you're still trying to even earn money but try to think of it earlier rather than later.  Remember, money put into Super will be taxed less so there are some advantages to it.  I do regret not sorting out my Super earlier, I literally only started to consider it on my late 30's so am pretty behind.

Lastly, I would recommend finding a good accountant, one that knows a thing or two about artists and freelancing.  Don't go to a run of the mill tax agency, they don't really know what they're doing.  When I first started, I did go to basic account agencies and they weren't very good and I paid more than I had to. 

If you have any suggestions or more things you would like to suggest, feel free to message me or write in the comments!

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