With little else to do over the past 18 months, many of us have been overthinking, spiralling and generally picking apart every decision we’ve ever made. For some, this has meant daydreaming about handing in your notice at your thankless 9 to 5 and winging it as a freelancer . But becoming self-employed doesn’t have to be a hopeless fantasy: a lot people manage it – and enjoy it way more than hour-long commutes, quarterly appraisals and socialising with people you would otherwise avoid at all costs. Sure, if you’re self-employed you’ve got to sort out your own taxes , navigate the tricky reality of not receiving sick pay and expect your monthly income to fluctuate massively. But there are many benefits – including being your own boss and having more autonomy in your day-to-day life. Before you take the plunge, though, there are a few things you should probably learn about balancing the books. While any freelancer can tell you that it’s perfectly normal to go through lull periods, your landlord probably won’t be so understanding if you tell them your rent is late because you’re “in your flop era”. If you’re already employed, it’s best to build up some savings before going freelance, just in case you initially struggle to secure enough work to cover essential costs. “Aim to have one year of living expenses put away in savings,” says Joseph James, 35, a freelance business coach at Money, Mindset & Strategy . “This might sound like a lot at first, but if you commit to it, the peace of mind you are giving yourself is amazing.” Josh Crowe, 23, does a range of freelance work across PR, music production, copywriting and journalism. He stresses that it’s vital to account for the inevitable “ebb and flow” of freelancing. “I think everyone’s been guilty of overspending one month,” he says. “But when a month goes well, it’s an even better opportunity to save more rather than just spend a load of money.” So when your first big payment lands, resist the urge to splurge it all on Deliveroo and a Goodhood candle. Freelance social researcher and writer Chloë Maughan, 27, adds that it’s also important to account for dreaded late payments. “There isn’t a regular payday, and sometimes my invoices can all come in late, which might mean that I get to the day where all of my utility bills are due to go out and I’ve actually not had enough money paid into my account to cover them,” she says. “So it’s really, really crucial having that emergency fund in place.” Sounds simple, but you do not want to end up frantically attempting to calculate your annual earnings on the eve of the tax return deadline, crying down the phone to your dad as you beg him to explain how Excel works. Do your future self a favour by keeping tabs on all of your income and outgoing expenses from the word go. “ I use spreadsheets […]
