My biggest personal finance tip for freelancers can eliminate stress and financial worries

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As a freelancer, making smart money moves is a must. Discover my top personal finance advice for freelancers so you can set yourself up for better financial success.

Being well organized and having good self-initiative and time management skills can help you be more successful in freelancing. It can also be beneficial for freelancers to have good money management skills. In most cases, freelancers do not earn a fixed fixed income or get paid every two weeks like many traditional employees. Instead, they often have variable workloads throughout the year. Because of this, income can fluctuate and payments can be sporadic.

As a freelance writer, I’ve had to make an effort to improve my money management habits over the years. Being a freelancer has been a constant learning experience. My biggest personal finance tip for other freelancers is to automate tax savings.

By doing this, I have been able to reduce my stress and feel more comfortable with my finances. Even when my workload is low, I know I already have the tax money I need set aside. Read on for more information and to see how doing this can help you.

The self-employed should automate tax savings

As an independent worker, you are responsible for booking and paying your own taxes. If you don’t do this, no one else will. If you miss quarterly tax payments and instead pay on April 15, you could be penalized. Also, if you haven’t been saving all year, it can be extremely stressful to have to pay a large sum of money all at once.

In the past, I have not automated my tax savings. Because of this, there were times when I had to raise a lot of money in just a few weeks to pay my taxes in full. This put significant stress on me. Once I started automating my tax savings, it made my life so much easier and improved my professional and personal life.

It’s a good idea to open a separate savings account for your tax savings. You’ll be less tempted to touch the bottoms, and the money will be there when you need to send a payment. If you’re ready to open a new savings account, check out our list of the best online savings accounts.

Next, automate your savings. Calculate how much money you’ll need for each quarter, then set up automatic withdrawals. You can choose how often money is transferred from your checking account to your savings account. For me, it works best to set up weekly withdrawals. This way, it feels like a more manageable chunk of money.

Important money management tips for freelancers

There are steps you can take to set yourself up for better financial success as a freelancer. Here are some key tips for managing money:

  • Find out the minimum income you need to make. Since your freelance income can fluctuate throughout the year, it’s imperative to know how much you need to pay all of your bills each month. That way, during the months when your workload is less, you can have a goal to make sure all your expenses are covered.
  • Set a budget. Setting and following a budget is a great way to make good use of your money and minimize unnecessary spending. If you’re not sure where to start, this guide will show you How to start budgeting for the first time. If you prefer a tech-friendly budgeting solution, you might consider using a budgeting app.
  • Diversify your business. Consider working on different types of projects and with a mix of clients. If work slows down with a client or project, you still have income opportunities available. Diversifying your workload can also help you stay more interested and excited about your work.

As a freelancer, it pays to have your finances in order. If you’re looking for additional tips or need help managing your money, check out these helpful personal finance resources.

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