Posted by: faultlessfinish | March 7, 2011

Financial Folly

A great book every freelancer should read is The Wealthy Freelancer.  The authors provide great advice for building a truly successful freelance business. In one chapter, they suggest outlining your ideal work day and then evaluating how close you are to living this day and what you need to do to get there.

My ideal day involves working for a few hours in the morning and then spending the afternoon doing various activities I enjoy (yoga, coffee with friends, long walks on the beach . . . you know, the usual). My ideal evening consists of lounging in a hot tub on the patio of my log cabin in the mountains (ah, I relax just thinking about it). While I am motivated by this ideal day, I have a few years to go before achieving it as there is one little bitty thing standing in my way – money.

Starting a freelance business is definitely a financial risk, but it’s a great way to learn how to manage money effectively. As weird as this may sound, there is something liberating about living on an extremely strict budget for a period of time. While I am by no means a financial expert and you should definitely seek advice from a professional regarding money when starting a business, here are a few pieces of advice based on my experiences so far:

  • Outline a budget at the beginning of every month and evaluate it at the end of every week. Make a list of all your expenses and incoming projects. If at the end of the first week you’ve spent $100 on entertainment and your budget is $300 for the month, you’ll know you need to scale back on spending in that area.
  • Live on cash. I’ve found it’s a lot more difficult to part with money when you can actually see it. At the beginning of each week, I take out the amount of money I’ll need to live on based on my budget. When I can physically see the money leaving my wallet, I’m more likely to think twice about the purchase. Having to use my debit/credit card at the end of the week if I’m over my budget is a drag and motivates me to be more careful the next week.
  • Pay off debt. While putting money away into a savings account is important, if you have debt, it’s likely that the interest you’re paying is more than you are putting away into savings. Get rid of the debt and you will end up saving hundreds of dollars.
  • Find small, simple ways to save. Buy groceries at the beginning of the week and then work from home to save  on food and transportation costs. Go to movies on cheap night. Invite friends over instead of going out. The little things do add up!
  • Indulge. When starting a business, it’s very important to spend and track your money carefully. But it’s also important to live your life. So after a long month, pamper yourself – buy that pair of shoes you really want, go to the spa, have dinner at your favourite, not-so-cheap restaurant. And do it guilt free. Allowing yourself to indulge once in a while will keep you motivated, focused, and happy.

So chart out your financial future, work towards your ideal day, and enjoy yourself in the process! Above all else, have confidence in yourself and your business – the money will come.

Namaste! 🙂

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Responses

  1. I’ve just ‘discovered’ your blog and I enjoyed reading the past few posts. I wish you the best of luck!

    • Thank you so much, Amira! I appreciate your kind words. It’s always great to know that people are reading.


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