If you work as a freelancer or a subcontractor, you may find that your income fluctuates significantly each month. For example, you could have an incredibly prosperous January, only to discover that you are out of work again come February. While this can be particularly nerve-wracking, there are several things you can do to manage your money better. Here’s how.
Find a way to bring in a little extra cash.
Sometimes, you may need to pick up a side hustle to supplement your income when work appears a little low on the ground. Thankfully, there are plenty of options to choose from, and you can even make money online, from the comfort of your own home. For example, you could start a blog sharing your advice and expertise with others, or work as a tutor. Alternatively, you can also bring in some extra money by selling household items or clothes that you no longer use.
Become budget savvy.
From an early age, we are taught the importance of saving money for a rainy day. This means that you always have some cash aside to support you through emergencies or difficult times. Despite this, we aren’t really taught about how to save it, which can lead to confusion and frequent overspending.
The best method for keeping on top of your money is to start budgeting. To do this, you can use a budgeting spreadsheet to track and monitor your spending habits and figure out how you can make changes.
To begin with, write down a list of everything you need to pay for. This should include:
- Mortgage/rent cost
- Utility bills (gas, electricity, water)
- Travel costs (fuel, public transport fees)
- Council tax/loan repayments
- Food & drink costs
- Entertainment costs (TV, phone, subscription services).
From this list, you should be able to figure out where you are overspending. For example, if you work as a CIS subcontractor, you may be overspending on your mortgage, and might want to look into alternative schemes. For more Cis mortgage advice, check out CisMortgage, who can help make your life much easier by helping you find the mortgage that is right for you.
Prepare for the bad months.
If you earn a little more than expected in a single month, ensure you put a bit of this money aside. Though it may be tempting to treat yourself, you need to remember that not every paycheck will be as high, and you need to focus on building up your rainy-day fund too. Otherwise, you will quickly land yourself in a difficult situation.
Over time, you may be able to predict when you will earn more money than usual. For example, many freelancers see an influx in work around the Christmas period. Being aware of the trends in your earnings is a great way to prepare yourself for difficult times, and can help you manage your projects more efficiently. For example, you can get started on your Christmas work early, to deal with the influx of orders or requests you will face in December.