How to save money as a freelancer

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When Emma recently mentioned she was opening up some slots for guest posts, I had a feeling this post would be up her street – especially as she’s recently joined the freelance gang. As someone who has been freelancing and working from home since 2009, it’s been really lovely to see her updates of starting up and smashing her income goals. How inspiring is that? Freelancing can be a cycle of feast or famine (especially during the summer months when everyone buggers off on their paid holiday leave), but with the right money saving tips, you can still enjoy a fantastic freelance life throughout the year.

Do your own invoicing – and get paid on time.

Let’s kick off with that part of freelancing that we all have a love-hate relationship with. Love sending people your bill, hate chasing it! There are plenty of great pieces of software out there to deal with your invoicing and accounts, my personal preference being FreeAgent (afil). But if you’re just starting out or want to save money, you can create your invoices using Excel or Google Drive Sheets. In fact, you can download free invoice templates on InvoiceHome.

Now the getting paid part. The best advice I can give here is to get late payment fees and early payment discounts into your Terms and Conditions.

  • Late payment fees are a fee you charge clients if they’re late paying your invoice.
  • Early payment discounts are discounts you offer clients who pay within a certain time period of paying. For example, if they pay within 48 hours, they get x discount. I offer 4% if they pay within 5 days of the invoice being sent. This makes the biggest impact to how fast my clients pay – I’ve had several who have gone from taking 6 weeks to pay, to suddenly paying within a week when I introduced this term.

Network on a budget – online and offline

There are lots of networking events around that cost an arm and a leg, or require you to sign up to a monthly membership. But you really don’t need to use them when you start out. My favourite way to network is by joining local networking groups on Facebook, where there are dedicated promotion days and you can focus on building relationships the rest of the time. Which is free! But it’s also important to go meet people face-to-face. I prefer the smaller coffee morning-style networking events. They’re usually only the cost of a coffee, more relaxed and you don’t have to commit to anything long-term. Have a look for events like Business Biscotti and Ladies Who Latte.

(But don’t forget, you can expense those networking events you do go to)

Buy your subscriptions annually

If you can afford to, and you’re sure you’re going to commit to a subscription, pay up front. There’s usually a big discount for buying in bulk, and while it’s one big blow to your account, at least you won’t get surprise payments going out through the month. Just make sure you set yourself an alert for a year’s time to warn future you.

Office furniture

When you’re kitting out your office, it’s easy to look to Pinterest and jump in the car to clear IKEA out. But you can easily create a beautiful office space on a budget. Whether it’s picking up a desk on Freecycle, grabbing a bargain office chair (I got mine in the Tesco Direct Christmas sale for £20) or loading up on stationery from Poundland (go have a look at Emma’s Poundland round ups for £1 bargains).

Work from home

Yes, if you’re freelance you can work from a coffee shop, co-working venue or rent-a-desk in an office. Actually, for your sanity sometimes you HAVE to. But working from home will reduce a lot of your costs. In fact, if you work from home, you can expense some of the costs of running it. There’s a handy infographic here to work out how to expense working from home.

Get software cheap – Appsumo

I’m a huge fan of Appsumo. Think of it as Groupon for really great software, ranging from Canva’s business plan to Skype Recorder. You’ll get an alert of 1-2 products available each week, which last for about a week. Most of the products are highly valuable, and the discounts are huge. If you want the best software, website templates, tools and apps, but on a budget, AppSumo is your tool (afil).

Swap services

When you’re freelance and dealing with other freelancers, there’s always the potential to do a service swap. For example, if you’re a social media trainer and you’re chatting to an aromatherapist, you could offer to swap an hour of your services for an hour of theirs (as long as they price up equally). Only do this if both of you are happy with the deal and what you’re getting though.

Hire a cleaner

Sounds a bit backwards, right? But if your hourly rate is £20-25, and a cleaner’s hourly rate is £10-15, does it make sense to spend your weekends spending hours cleaning, when you could reclaim that time to work on your business and potentially increase your income? Same goes for anything that you’re spending a long time on but doesn’t pay off. For example, logo design. I’m terrible at it. And I can spend hours tweaking a design. OR, I send my requirements to someone lovely on Fiverr.com who will do it for $5 (and probably in a little less time).

SAVE. Seriously, Save

It can be easy to get excited when you see your freelance income come in and go splurge on some ridiculous shoes you’ll never actually wear because you work from home now*.

*True story.

But you HAVE to save each month. And I’m talking 30%. 30% will cover your tax, NI and a little extra in case you have a tight month or simply want extra saved so that you can treat yourself after going through The Dreaded Self Assessment Tax Return.

So, those are some of the things you can save on. But what should you splurge on?

  • Business insurance. Don’t scrimp on this! If you’re a blogger, anyone in digital, or producing content for a brand, you need Professional Indemnity Insurance. It might seem like a cost you can skip, but for peace of mind it’s essential. Plus, some brands or clients will now check you have it. I pay about £15 a month, although I’ve seen some for around £100 a year, so it’s not crazy expensive.
  • An accountant (if you need one). Hands up if you’re terrible at finance? *Raises hand*. That’s why I have an accountant, who makes sure I don’t do anything daft, and takes a lot of the stress out of my accounts. You don’t have to have one if you’re a sole trader (you do if you’re a Limited Company), but if you feel worried about your finances, invest in one. A good one will earn back the investment for you.
  • Dude, you’re working from home. Don’t be that freelancer working until three jumpers and a slanket. Don’t forget, it could be tax deductable.
  • Working for yourself is one of the biggest benefits of freelancing, but it can also be challenging not having the support and accountability of co-workers. It’s also hard to know how to grow your business, overcome career blocks and that niggling fear of public speaking which is stopping you growing your business. A great career coach will help you set achievable goals, grow your business, delve into and dissolve limiting beliefs which stop you achieving what you want to and getting focused. Which is why I launched The Freelance Lifestyle Coach, a coaching service dedicated to freelancers.

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Bio

Emma Cossey is The Freelance Lifestyle Coach, a qualified career and life coach specialising in helping freelancers and the self-employed achieve their goals. She's also runs The Freelance Lifestyle, a blog, podcast, Facebook community and hangout for lovely freelance types.

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