Money management for freelance and contract workers
JOHANNESBURG – Freelance and contract workers can make long-term financial plans.
Working on a freelance basis can be quite challenging from a long-term financial planning perspective as it may be hard to predict where the next income will come from and how much it will be.
However, with a little bit of forward planning and prioritising, freelance and contract workers can make long-term financial plans in the same way that people in the mainstream workforce do it.
“The reality is that whether you are employed on a permanent basis or not, you still have to have your ducks in a row financially,” said Eunice Sibiya, head of consumer education at FNB.
“Freelance workers are faced with the challenge of having to make both long and short-term financial plans while they have an income that is hard to predict. A freelance worker must cater for retirement and in some instances education savings, and also make provision for day-to-day expenses such as petrol and groceries,” added Sibiya.
Freelancers are also expected to pay taxes like everyone else if they fall within the income bracket that qualifies them to pay tax. Therefore this is another area that needs careful attention to ensure that everything tax related is in order.
“Never try to undertake complex financial matters such as tax and retirement planning by yourself, rather enlist the services of a professional financial adviser or tax practitioner. This will alleviate the stress of having to handle this yourself and most importantly, eliminate room for errors.”
How to stay in control by using the following tips:
- Budget monthly
Have a budget in place to help you keep an eye on where your money goes. Remember as a freelancer your revenue streams may fluctuate from month to month. A budget will help you monitor your expenses and allocate money to the most import expenses. Also note that not only do you have to allocate money to your personal expenses, but your business expenses need to be taken into consideration as well, if applicable.
- Save and invest for your future needs
Even during tough months, always put something aside into a savings account, this will cushion you against unexpected expenses.
“The story of a once successful sportsperson gone broke after an illustrious career is an all too familiar story in South Africa. This is primarily because of a lack of basic financial management skills and not asking for professional help.”
How well would you rate yourself at budgeting and why? Tweet @Fourways_Review
