If you’re a freelancer, you likely spend a significant amount of time each week trying to drum up new buiness (aka, doing the freelance hustle). While of course this is a huge part of the gig, you can give yourself a bit of breathing room—and improve your cash flow—by embracing a few practical money saving habits. After all, reducing work will driving income is the name of the game, right?
Check out these nine cost cutting tips for freelancers...
Track Your Expenses
Yes, this is the most obvious of our tips, but it’s a crucial one. If you want to save money and ease your annual tax burden, you absolutely must carefully track every single expense. Make sure you include everything: from PayPal fees to new equipment; home office space to online accounting software costs. The point is this: the more diligent you are about tracking your expenses the better your decision-making will be when it comes to all purchases. And that translates into money saved.
Review Your Health Insurance
If you're in the U.S., there's a good chance you've reviewed your health insurance recently. But if you're not (or haven't), this might be a good place to cut costs. Of course, you need to take your health into account, but see what your options are. Doing things like increasing your deductible can reduce your monthly payment. Again, be aware of the risks of doing that. You might want to also look into buying your insurance through HealthCare.gov; there could be some significant savings available to you. (As always, consult a professional on matters like these.)
Slow Your Equipment Upgrades
Yes, the latest smartphone looks amazing, but is your current phone still doing its job? If so, it’s probably okay to skip the upgrade. Instead of buying a new computer when your old one stops working, try getting it repaired first. While some upgrades are unavoidable, you don’t need to spend money on the latest shiny object. One thing to consider when making big equipment upgrade purchases is the tax deduction of that purchase. While every case is different, think through the finances of what a purchase will do to your bottom line, assuming it can be written off.
Use Open Source or Cloud Based Software
While you might need specific software programs for your work, it’s likely there are great low cost or free software options for other office needs. Google Apps, for instance, gives you email, document creation/management and calendaring for either a very low cost or free. In addition to being low cost, cloud-based software usually saves and backs up your work in real time. For example, in Kashoo, data entry is saved in real time, making the freshest data accessible from wherever, whenever.
Use Apps Instead of Hiring Pros
While it would be great to hire a professional for small projects, the costs can be daunting—and technology is changing the game. It's getting tougher and tougher to discern what was done by a pro and what was done DIY with the help of great software. For example, say you need some graphic design work. Cloud-based Canva (one of our favorite apps) can make even the most artistically-challenged freelancer look pretty good. And since we can't not reference our own software, Kashoo is a great low-cost bookkeeping option when it comes to satisfying freelancer accounting needs. This isn't to say that you should skimp on hiring the big guns when you need them, but just know that sometimes DIY is a lot cheaper and just as good.
Set Aside Money for Taxes and Emergency Funds
No, this tip won’t actually save you money but it will save your sanity and make it possible for you to maintain your freelance lifestyle. Freelancers don’t have taxes taken out of their paychecks but that doesn't mean they don't owe them. Setting aside a percentage of your earnings to pay taxes (and paying them quarterly) will make life easier. It’s critical that you have reserves in an emergency funds too just in case you lose a big client unexpectedly. (And make sure those savings are in an interest-bearing savings account!)
Pool Purchasing Power
When you need to make purchases for your business, you’ll find the less your order the more it costs. Partner with other freelancers to buy supplies like printer paper and other office gear. Or consider joining a purchasing cooperative (there are local and national co-ops) that offer great savings options.
Don’t Waste Time
As a freelancer, time is money, straight up. If you waste time during your workday, you run the risk of pushing back delivery deadlines, which is not a great way to nurture your client base. Being a freelancer requires strong focus and discipline in order to be productive. Don’t let time wasters like Facebook eat up your day. Cluster your meetings and phone calls into a single day to reduce on travel and prep time. Track your hours. Bottom line: every minute matters!
Plan for Splurges and Vacations
Even freelancers need to splurge and go on vacation, and setting aside money to do just that will not only help preserve your sanity, but will also save you money. It’s a much smarter plan to use savings instead of reaching for your credit card with it’s high interest rates for such event.
If you make these nine tips regular habits, you’ll find it really gives you a bit of breathing room without denting your business bank account. (In fact, these tips should help you grow your business!)
Have a freelance cost-cutting tip of your own? Tweet it at us.