Earning enough from freelancing to pay the monthly bills and buy food is a worthy achievement, so if you’ve managed this, well done. Unfortunately, freelancer finances have to cover more than the basics.
You need to be able to afford to save for five very important things out of your monthly earnings, too. Last time I looked at saving for the dreaded Bad Month (or Three), when well-paid work disappears or just doesn’t come your way.
But the second thing freelancers need to save for is…
We’ve established that earning enough for your food, energy, phone bill, mortgage etc. is great. There are usually no big surprises there and if those bills are going to rise, you normally know in advance. At that stage, you either have to find a way to bring in more money or ask yourself whether that new iPhone is really worth the eye-watering payment it will demand every month.
But the things that catch us out financially are the failure of white goods, or our car, roof, boiler. Maybe our housemate decides to move out or our partner is made redundant. A family illness that sees us making multiple long-distance trips, countless phone calls and more days away from work than we can afford.
What Could Possibly Go Wrong?
I described my own Bad Month in Part 1 and yes, you’ve guessed it, I have personal experience of The Unexpected too.
I returned from my holiday early in August to find that my dishwasher had leaked – flooding the floor, tripping the electrics and turning the contents of fridges and freezers into black, foul-smelling ooze. The temptation to shut the front door and never return was fairly strong.
Also, this last month has merely been the baddest month of a Bad Three Months, because my other half was made redundant in the summer, and has developed an unfortunate habit of being shortlisted and told he is ‘top of the pile’ for new jobs – that eventually go to someone else.
If someone else contributes to your household bills and family expenses, then consider if you earn enough to keep things going if they are unexpectedly having a Bad Month (or Three) too.
Happier Tales of the Unexpected
Of course, unexpected doesn’t always mean unpleasant.
Your son or daughter might bring home a letter about an expensive but vital-for-their-education or chance-of-a-lifetime school trip. A friend may decide to move their wedding out of the rainy UK to the sunny Maldives. They’re not disasters, but they are unexpected expenses.
None of us are immune from these unexpected and expensive events, so ensure you have a sum put by to deal with them when they occur.
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