Freelancers Finance rule number 1.
“Spend less than you earn.”
It might sound easy and obvious but most people don’t understand this rule.
The rule is as simple as it sounds but for most of the people it is harder to obtain. This rule is relevant to freelancers since you dont want to operate your service on a loss.
See yourself as a profitable business. As soon as you spend more than you earn your business is not profitable, you are not break even. ->You want to avoid an unprofitable business at all costs.
You can run your business or freelance service on credit and debt. There are solid strategies and some might work out. credit and debt are some how ways capitalism work but it is much more riskier than following the advice i am giving you in this post. Sending less than you make and having some backup is much more sustainable and you’ll be able to earn money with you passion for a lifetime. Do you really want to risk it?
Effects of spending less than you earn
- Pay back your debts as quick as possible. If you don’t have any: your personal finance is profitable and sustainable.
- You are able to save for a financial backup. This will bring you through hard times.
- You are able to invest into new gear or start a personal campaign for new clients.
- You are able to reinvest what you save and get a passive income stream.
- Your strategy is sustainable and set for long term plans.
- Freelance is less riskier.
You have to summarize all of your earnings and then summarize all of your spending. Earnings are easy for most of you. But if you have diversified income streams just add them together. Whats tricky are the expenditures. They are hidden in fees