4 Essential Tips for Handling Freelance Income Fluctuations
While freelancing offers freedom from 9 to 5 scheduling and the ability to set your income, it can also bring much uncertainty. A major challenge many design freelancers face when making the switch from being an employee is dealing with income fluctuations. Going from consistent monthly paychecks to receiving sporadic checks from freelance clients can be stressful and frustrating.
Often, when freelancers are unprepared for this change in income consistency, many are left struggling to pay monthly bills. However, with a few proactive measures and an organized system, you can avoid the frustrations and glide through design income fluctuations with ease. The following are four essential tips to simplify your transition.
Keep a Yearly Log
Although income fluctuations can change between years, you’ll likely notice certain seasons will bring more projects and increased income. To properly plan for these fluctuations, keep a yearly project log. Take note of when income is highest and when it’s lowest. These logs can then help you properly plan for income fluctuations in future years by setting aside cash for those seasons when you typically experience project declines. The yearly log can be as simple as reviewing income peaks and dips through your income reports when tax season arrives.
Always Plan Ahead
Properly planning for freelance design income fluctuations is all about being proactive. This process involves budgeting (yes, the dreaded ‘b’ word) and saving as much as possible. The budgeting process can be completed in many ways but, at the very least, should include listing your monthly financial obligations including everything from groceries to the electricity bill. This will help you avoid being surprised with a forgotten expense after the month’s income has been spent.
Planning ahead for design income fluctuations also involves saving as much as possible. Building a healthy savings account is essential, especially for new freelancers. This savings is essential because it can act as a buffer during unexpected income fluctuations in the beginning freelance days.
Pay Bills First
Since freelance income can, at times, be a little sporadic, you must spend money with care. Say goodbye to impulse purchases and unnecessary costly gadgets until your freelance income becomes more consistent. To ensure your monthly bills are always paid on time, begin paying them directly after receiving client payments. Rather than waiting until a bill’s payment deadline, paying all bills at the outset of each month will ensure your responsibilities are fulfilled before the urge for impulse spending sets in.
A program like YNAB can help with this task.
Find new Clients
Of course, the best way to deal with freelance design income fluctuations is to avoid them. To do this, you must continually market to new clients. Rather than waiting to connect with potential clients until an income decline is in full-swing, be proactive and incorporate marketing efforts into your normal weekly schedule. In time, this can ensure you’ll always have a steady stream of project requests and a healthy income to accompany them.
From learning how to budget to paying your bills first, many methods can be used to easily deal with freelance design income fluctuations. By having an organized system, you can avoid the frustrations that many other freelancers have experienced and can instead more fully enjoy the freedoms of being an independent professional.
Photo Source: Stuart Miles
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