It’s time again for changes for the better this coming new year. And for most, money goals will be a top priority in our lists. How are your finances last year? Did you hit your financial goals? Or do you have money goals in the first place?
If the answer is no, worry not. You don’t need to blame yourself further. It’s the New Year! So there’s a chance to start anew in the days to come. With that, here are the top 8 New Year money goals for freelancers.
Set Up a Budget
Time and time again, the foundation of managing your finances is setting a budget. Yes, it may sound boring, but how can you improve something you don’t measure? If you don’t have a budget yet, this is your first priority for the year.
Firstly, collate all your income sources and separate percentage amounts for the following categories. The general rule is:
- 50% for Necessities
- 30% for Want
- 20% for Savings
The problem with freelancers is that income may not be consistent every month. Some months may rake in a lot of income. But other months might be stale.
Track Your Expenses
If you can’t create an exact budget from recurring income, track your expenses to create your budget.
You can use a spreadsheet or mobile applications. For the longest time, I have been using a simple app Expense Manager (iOS & Android). You can use whatever app you can as long as you can stick with it.
You need to track your expenses so that you can gauge your monthly budget. For example, after tracking and listing your monthly expenses, you found out that:
16,500 Total Necessities
You want to work on your income to hit this minimum amount to survive. And since you don’t know your total revenue for the month, you can have a maximum spend for wants and a target savings amount per month.
Only you can gauge this since it differs from person to person. Take note, though; you don’t want your budget to be restrictive that it’s impossible to follow.
Build Your Emergency Fund
Emergencies are inevitable. You will never know when something terrible will happen. Someone stole your laptop. A family member got sick. You are doing well with your budgeting, but suddenly, you need to pay up with all your savings because of an emergency.
This should not be the case. The next on the list is your Emergency Fund! An emergency fund protects you from sudden significant item expenses that can derail you from your financial journey.
The recommended amount is around 6-months your monthly expenses.
What if you still have debts to pay? How can you build 6-months worth then? Well, you don’t have to build it on the get-go. At least, have 1 month’s worth of emergency funds.
With this, you don’t have to rely on credit cards or personal loans for sudden emergencies.
Life & Health Insurance
And to aid you with those emergencies, another financial goal for the year is life and health insurance.
Life insurance protects your family just in case a disease hits you. And you can’t work anymore, while health insurance is for those immediate health concerns that go your way.
You might have the money for it, but do you really want to spend everything on your health problems? Protect your income by buying the right insurance instruments for you.
Do a Savings Challenge
When you think about savings, it’s quite boring. I mean, who likes to set aside the money you can spend now? And wants likes to keep tabs on numbers? It’s quite painful.
If this is your problem, a savings challenge can be a tool for your goals. Savings challenge is a fun and less painful way to save for your future. Here are the most common ones:
Ask for a Raise
The year is done. And you might have gained knowledge and skills that are valuable for your clients. Especially if you are scarce in time, your per hour might be more expensive now than before.
Have you thought of asking a raise? The new year might be a good time to request one. But make sure to sound of value. List a number of reasons why your employer/client will benefit from giving you more money.
You’ll never know, they might just give you one.
Find New Clients
You don’t have to be at the mercy of one client. For this year, you might want to find new clients to increase your income. As a freelancer, we have the power to find other clients that we can help achieve their goals. We can control our income.
If we help enough people, they can surely help us back financially. It’s a win-win.
By doing the tips above, I hope you reach your financial goals for the coming year! Happy New Year!