Jon Dela Cruz
If you work as a freelancer, addressing a few simple factors may help save some money. Over the long-term, the savings, in all likelihood, will add up to be a tidy sum. Here’s what can get you on your way.
An increasing number of freelancers now work with clients from other countries. While this opens up a sea of opportunities, often times people end up losing money when receiving payments. This usually happens because of steep fees and poor exchange rates. Using the right service provider ensures that you get cost-effective deals when receiving cross-border payments.
With the TransferWise Borderless account, you get free receiving accounts in U.S. dollars, British pounds, and euros. TransferWise also lets you receive payments by providing your clients no more than your email address. Some other prominent overseas fund transfer companies that provide receiving accounts in multiple currencies include OFX and World First. If your requirement does not extend beyond receiving international payments directly into your bank account, you may turn to alternatives such as Currencies Direct, TorFX, or FC Exchange.
Freelancers who have trouble keeping up with their everyday expenses may want to consider increasing their rates. You can get to work on this in two ways. One is to ask your longstanding clients for a hike and the other is to look for new clients at your preferred rate. Asking a client who you have worked with for less than a year for a raise is not a good idea, unless you are sure you have provided exemplary services.
While you may have the ideal life right now, are you making financial decisions to account for your future? A 2016 Greenberg Quinlan Rosner Research poll indicated that about 40% of the freelancers who participated did not have formal plans for retirement. Freelancers get a host of options from which to chose, including mutual funds and term deposits. You may also get country-specific alternatives. Residents of the U.S., for instance, can think about investing in a Solo 401(k) or a Simplified Employee Pension Individual Retirement Arrangement (SEP IRA).
This refers to a zero-sum budget where you allocate every bit of your earnings suitably by the end of each month. This way, you put all your money to good use. Consider this. You make $8,000 per month and spend an average of $6,000. The $2,000 that remains in your checking account will work better in a term deposit or a savings account.
Contacting your accountant only before you need to file taxes is not the best way forward. When you stay in touch with your accountant keeping track of any potential tax deduction becomes easy. Besides, giving your accountant a pile of work around tax time may cost you more. Freelancers who file their own taxes should remain well aware of local rules and regulations. If you feel like making a purchase because of an associated tax deduction, make sure it’s a valid requirement. You will, after all, still need to pay for the purchase.
