Freelancers need to have such a wide variety of skills in order to keep their solo businesses going. Whether it’s figuring out how best to manage your invoicing or how to juggle multiple projects at a time, there’s a lot I had to learn when I started my freelance writing/editing business that had very little to do with the actual writing and editing. That being said, there is one skill that I keep going back to over and over again and that always comes to mind first and foremost when people ask me for advice about my freelance career or lifestyle.
The most important skill I think all freelancers should develop is to become good at saving money. Arguably, this is an important skill for everyone, but I do think it’s particularly essential if you’re self-employed. Here’s why saving money is the number one thing you’ll want to get good at fast if you’re planning on going it alone in your career.
Work is Unpredictable
It goes without saying that freelance work can be very unpredictable. In fact, the potential lack of steady work and income is one of the main reasons I hear cited when people explain why they don’t want to be self-employed. The lack of income stability that comes with freelancing was definitely one of the main things that prevented me from taking the plunge at first, but learning to be good at saving money can really mitigate this fear. The thing about freelancing is that you’re likely going to have great financial months juxtaposed with terrible ones. This means that when the money is coming in, you have to put a decent chunk of it aside in anticipation of those dry seasons. Setting aside enough to cover your expenses for a couple of months is important to make sure you can get by when the work slows down.
Clients Don’t Always Pay on Time
Everyone is busy and everyone is managing their own financial challenges, which means that clients won’t always pay on time. Even when the freelance work is plentiful, that still doesn’t mean you’ll necessarily be getting regular paycheques. I once had a pretty serious scare when one of my biggest clients was almost three months overdue in paying their invoices. I never stopped working and there was always lots to do for other clients, but waiting so long for some pretty sizeable cheques saw my Visa bill climb higher than I was comfortable with. The money came through in the end, but I would have felt a lot better if I’d had a little more in my emergency fund at that time in order to fill in the gap while I was waiting. And waiting, and waiting.
Unexpected Business Expenses Will Come Up
Unexpected expenses are inevitable, last year I was thrown for a loop when I suddenly had to buy a new computer for work. When I worked in an office and my computer crashed, all I had to do was call IT and they’d have a new one on my desk and working within an hour totally free of charge. Now that I’m self-employed, I had to dip into that emergency fund I keep talking about in order to make sure my business has the one tool I really need the most. It wasn’t fun parting with all that money unexpectedly and in one fell swoop, but it wasn’t a major financial blow since I had funds set aside for exactly this kind of thing.
It Decreases Stress and Anxiety
Ultimately, all the reasons listed above amount to the same thing: saving money and having a healthy emergency fund for your business decreases stress and anxiety. Money woes can be some of the most crippling challenges to your overall mental health and well-being, not to mention the obvious stress and anxiety that comes from not being able to make ends meet. In order to really be able to enjoy the perks of being self-employed, you can’t be living with the stress, fear, and anxiety of not being able to pay the bills. Ever since I built up a decent emergency fund for both my business and my life, I feel so much more confident and relaxed. Now I know that even if I hit a few bumps in the road, I’ll be able to cover my expenses while I work everything out and am not in immediate danger of going into debt do to a simple business hiccup.
I know that saving money isn’t easy, and it certainly isn’t the most glamorous or exciting thing to think about, but it is absolutely essential. Hopefully by now I’ve got you inspired to start an emergency fund of your own or top it up a little bit if you have one already.