I’m a freelancer: a fully-fledged member of the gig economy. As such, I’m a jack-of-all-trades (actually a select few in truth) and a master of multiple skills. Most importantly, I have a bounty of enthusiasm for any creative venture that will make some money!
Money management as a #digitalnomad
I work almost entirely remotely and get to tag my Instagram pics with #digitalnomad. Even if I have only travelled two minutes from my house-share to work in a nearby hipster café!
I’ve been embracing the freelance lifestyle for over eighteen months. But I have only now worked out how to budget each month efficiently and appropriately.
Forgetting, of course, that at least 25% of every invoice you get paid should be put aside to pay your tax contributions (and perhaps student loan repayments), you’ve worked hard, now you can play hard! Perhaps….
The hidden costs of not having an office
I spend a significant amount of my disposable income in cafes. With no office outside of my bedroom, I regularly escape to nearby coffee shops and quirky daytime bars or public libraries to set up my office for the day.
I’ll choose anywhere with comfortable seats, great coffee and reliable WIFI. I bless them with my presence and an eight-hour flow of my money. But with endless hot beverages, croissant after croissant, hipster sandwiches and side salads. It all starts to get expensive.
There are also extensive costs for social outings. Moaning about a co-worker with another colleague at the office water-cooler. So I fill my free time with different but necessary social activities. An expensive gym membership, trips to the theatre and extensive pub visits are all bringing my bank balance down daily.
Budgeting for your mental balance
People-watching is essentially part of my job role, and it can get pricey but spending time with people is essential for the sake of my mental health. Budgeting for time with friends or other living, breathing human beings saves me from losing my noggin’.
There are also upfront costs that make freelancing more expensive than safe employment. Printing, travel, tech support and insurances are all extra costs. They are hard to avoid and difficult to get good deals with on an individual scale. Freelancers miss out on corporate discounts and incentives. There’s no cycle to work scheme available to freelancers who work in their pyjamas 😊
Coping with inconsistent cash-flow
Starting out as a freelancer left me with moderate credit card debt for the usual expenses, especially as many clients would not pay invoices on time or without significant prompting and regular reminders.
With perseverance and hard work, I began to drag myself out of the red. Getting a loan when your income fluctuates is practically impossible, so I knew I had to reverse my spending habits to not live on my credit card but instead be pre-paying monthly.
Set a budget and then adjust for real-life
Since getting the HyperJar app, I started an ‘Eating Out’ jar and at first loaded it with £100 for the month however this quickly disappeared. It took a few months of adjustment and self-awareness to realise my expenses in cafes alone exceed £300.
Factoring in that office space or a hot desk daily would cost well over £300 a month, I’ve come to terms with this figure, especially as I get fed delicious local food and risk meeting interesting, gorgeous freelancers at the same time too!
Watching my available money decrease over the month really helped level out my spending habits and curb my costs. Now, I try not to go to cafes every day and when I do, I slow down my intake of calories, saving on cash and the cost of new clothes with elastic waistbands!
Plan for the (expected) unexpected
I’ve also started a separate jar for other expenses to ensure I am putting money aside for any ‘workplace’ incidents. If I need to upgrade my laptop, or just buy more printer paper- the usual costs you wouldn’t think twice about pinching from the office stationery cupboard- it’ll come from my allocated jar.
Knowledge puts you in control
I feel way more in control of my spending and prepared for any emergencies. Similarly, I have a ‘Culture’ jar for social outings. I allocate a budget at the start of each month now, instead of being confronted with a huge credit card bill at the end of each month.
I need to ensure I get out and see other human beings; working remotely as a freelancer can be lonely if you never make an excuse to leave the house, and now I can do so without getting into debt.