Billing Your Freelance Purchasers However Nonetheless Broke? Right here’s How Good Budgeting Can Assist

By Uwe Dreissigacker

So you are an exceptional freelancer. You are in control of your game, from sales and marketing to actual service delivery and customer support. You’ve managed to build a steady stream of happy, satisfied, and paying customers, which also means that you bill regularly. But something about your finances is causing sleepless nights, and that’s because you’ve noticed you’ve been broke for a while. What gives?

If you are suffering from a cash shortage despite a steady stream of paying customers, you are likely either lacking a budget or not following one that reflects your income realities. This can lead to serious financial problems, but how exactly can you remedy the situation? Often times, the solution is as simple as creating and implementing a smart budgeting plan.

Having money in the bank doesn’t automatically mean you can make whatever purchase you want. Outstanding invoices and other uncovered expenses must be considered before the next payout.

Your freelance life will become much less stressful as you improve your financial skills, and the good news is that you don’t need an accounting degree to practice smart budgeting. So, if you’re having money management issues, here are some smart budgeting tips that can get your financial life back on track.

1. Create a transformative budget

A lot of people don’t budget simply because they find it boring. The thought of keeping track of the costs, calculating and making sure everything is in order makes daylight difficult for them. But when you are struggling with money, you really have no excuse not to budget. It’s a savior.

Think of it this way: If all you need to work on your budget a few hours a month to get your financial life back on track, why not? Instead of worrying about the careful budgeting process, focus instead on the benefits and value it brings to your life and dive in.

2. Actually use the transformative budget

All of your efforts will be useless if you create a budget and sit on it. Budgets are living financial documents that are not meant to collect dust in a closet. The magic comes when you use your budget. So read it before you make any major spending decisions

Let it be your guide. Make sure you update it as you settle bills and spend on monthly expenses. Keeping track of everything means you always know how much money you can spend. Say hello to a well-oiled, carefully measured spending machine.

3. Track your expenses like a hawk

Small unchecked purchases can easily ruin your budget as they can add up very quickly. The best way to avoid unpleasant surprises is to track your spending to uncover places where you may inadvertently overspend. Always keep your receipts and purchases in an expense journal with clear labels and categories so you can easily identify some areas where you are having trouble staying on budget.

4. Avoid unnecessary credit

Your credit and income could qualify you for certain loans and credit cards. However, if you don’t really need them, why? When there isn’t any real expense that you can’t afford, and you’ve found that you can service your monthly repayments without affecting your other obligations, there really is no need to borrow.

5. Leave some leeway for non-budgeted expenses

Your net income, or the money that is available after you subtract your expenses from your income, is a very important part of your budget. The money left over after spending can be used for fun activities and entertainment, but only up to a certain limit. Don’t go crazy with this money. Try to keep something and stretch it out for the whole month.

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6. Save for larger purchases

When you learn to delay gratification, half of your financial problems will go away. Learn how to prioritize the essentials before impulse buying and how to take the time to evaluate your decisions. Decide whether discounts and price comparisons are required after shopping.

If you save money on larger purchases instead of using loans, you avoid paying exorbitant interest rates. Better still, you can avoid neglecting bills and other obligations. Take it from me – you better not have to deal with the consequences of a failure.

7. Look for the best prices

Make optimal use of the existing price comparison tools when shopping. There are so many options readily available, especially when shopping online. Bizrate, Shopping.com, Google Shopping, Shopzilla and PriceGrabber are just a few examples that I have had great experiences with.

Make sure you get the best prices for products and services that keep your business running whenever possible. Look for cheaper alternatives to the expensive consumer brands and always keep an eye out for coupons and discounts that can save you big bucks in the long run.

8. Tame credit card purchases

Not sure about your spending habits? Then avoid paying by credit card and use debit or cash instead. Why? Because credit cards can be the number one enemy of a bad money backer, as they allow you to spend without thinking, and before you know it, you are in heavy debt. So if it’s an item that you don’t really need or that you can’t afford, resist the urge to reach for your credit card. You’re going to do yourself a great favor.

9. Save regularly

If you haven’t already done so, consider opening a business savings account and making a habit of putting money on it every month. It’s a healthy habit to develop, and these days, transfers from your bank can be easily automated so that funds are converted into savings directly from your checking account.

Unexpected events must always arise and unexpected costs are inevitable. A separate savings account gives you an extra cushion to deal with sudden expenses. Also, you can make a little more money by keeping cash in the account.

10. Define and understand your risks

Next, acknowledge the fact that every business carries some risk. As a professional freelancer, you need to consider your long-term and short-term risks in order to accurately budget and forecast your finances. Common potential risks can be an underestimation of the market, burglary and theft, loss of reputation or brand value, and product liability. Use your budget to plan any threats that could affect your business. Once you have a list, you can start implementing contingency planning.

11. Practice makes perfect

Budgeting won’t be easy in the beginning – you will struggle and make mistakes. But the most important thing is that you keep practicing to develop the discipline. Whether you delay shopping or get used to doing price comparisons on a regular basis, the more you practice, the more rooted these habits will take in your life – not to mention money management becomes easier for you and the better it’ll be for you financially be.

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About the author

Contribution by: Uwe Dreissigacker

Uwe Dreissigacker is the founder of the online invoice software InvoiceBerry and offers companies free invoice templates. Small businesses and sole proprietorships can use the tool to create, send, and manage their invoices, quotes, and credits. In his free time, Uwe travels the world and enjoys getting to know different cultures.

Company: InvoiceBerry
Website: www.invoiceberry.com
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