Making money as a freelancer can be tough. Income varies from month to month and is unpredictable. The best ways to be ready for a broke week or two, is to start building up savings and cutting costs. But how?
The best place to start is to look at your current spending habits and adjust them.
Here are 10 tips for budgeting your life better.
Here's a free guide to all the tips as well.
1. Write it all down
All of it. Every piece of income you receive, and every cent you spend. Writing it all down in one place – physically or on a digital spreadsheet – gives you a full overview of how your finances look and where the money comes from (and disappears to!).
2. Identify your income streams
You can’t budget something you don’t have. Make a list of all of the income you receive every month. As well as general pay from clients or your job, be sure to include any passive income – for example, money earned through existing blogs, videos, advertising, etc.
3. Reduce your cost of living
This can be a tricky one these days, but there are still ways to reduce your cost of living like selling things you no longer use on second-hand sites like Poshmark or Facebook Marketplace, and considering downsizing your home or moving to an area with a lower cost of living.
4. Break down your bills
Itemize every bill you pay so you know exactly what you’re paying for. Understand how much money per month is used for bills and weigh that up against your average income. Calculate how much money you have left over once the essentials are paid for.
5. Reduce your bills
Now that you know which bills are going out every month, consider reducing some of them. Cancel monthly subscriptions that you’re not using much. Where possible, pay for insurance on your car, home, etc, on a yearly basis instead of monthly – most companies offer savings for doing this. Also be mindful of power consumption by switching off/unplugging anything that isn’t in use.
6. Cut all expenses you don’t need
These are the things you can live without. Avoid buying coffees or lunch on the go; try to walk, cycle, or use public transport rather than driving; beware of impulse purchases! Give everything you buy real consideration and decide whether you really need it.
7. Meal planning & batching
Buying groceries can add up quickly. One way to combat this is to plan your meals. If you already know what you’re cooking, you can make a list of ingredients you need. It takes willpower, but stick to the list when shopping (and never go to the store on an empty stomach!).
Batch-cooking food to freeze and use later can also be helpful, as ingredients are sometimes cheaper when bought in bulk. Cut down on unnecessary takeaways and meals out.
Other things you can pre-plan for include birthdays and Christmas – budget for gift buying in advance. On vacation, set yourself a daily budget and stick to it.
8. Save money whenever possible
Organize your saving into needs (bills, gas, groceries), wants, and an emergency fund (for car breakdowns, repairs, medical bills). At the end of the month, put anything you can afford into a savings account. Only use the savings accounts for their specific purpose.
9. Don’t forget to have some fun
Be mindful of your goal to save money, but allow yourself to have some treats. It’s hard to constantly squirrel away money without having any fun, so organize something to do on a weekly or monthly basis – like going to see a movie, going out for dinner, etc.
You don’t always have to spend money to have fun. Outdoor activities like hiking, movie nights at home with friends, or quality time with the family can be done for free.
Set goals in your saving journey, and allow yourself a treat to celebrate getting there. This’ll give you incentive to keep going.
10. Get an accountability buddy
Ask a friend or family member to hold you accountable for your spending and saving. Check in with them regularly and keep them updated, and ask that they provide motivation and support when you’re feeling the pinch.
BONUS TIP – be patient!
It takes time to undo impulsive spending habits or get used to living on less money. You won’t immediately be perfect and saving a ton of cash. Remember that building up a financial buffer takes time, and won’t be super easy. Be patient with yourself, and keep your goals for the future in mind to motivate you.
So there you have it. Ten – well, eleven – tips to start budgeting your life a little better. Do you have any budgeting tips or hacks that you swear by? Let us know in the comments!
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