This post originally appeared on 22Seven’s blog. If you suck with money, download their app, read the funny blog posts, and for the love of the dark lord and all that is unholy, please stop buying Lotto tickets.
Here’s a confession: I tried freelancing before, back when I was still young enough to think I could get away with purple eye-liner and home-made haute couture. I tried and I failed- miserably. Between not knowing how to charge properly, to not knowing how to enforce those charges properly, I spent more time worrying about money than I did working for it.
Fast forward about a hundred years (in advertising time) and I’m trying it again. But this time around, I’m using all of the lessons I learnt moonlighting while holding down a day job to better manage my clients, myself, and my money. And I have far more sensible eye makeup on.
While my decision to go freelance fulltime- again- was a little impetuous, I realised I was going to have to put a lot of planning into mitigating the potential damage I was about to rain on my financial future.
You see, before I became a fulltime Internet nomad (which sounds better than ‘stay at home blogger who wears pyjama pants all day’), I was a pretty well paid content strategist at a small agency that had just been bought by a big agency. I had learnt to live and shop in that privileged middle-class mentality I’d previously only ever seen from people with upper management titles. I wouldn’t say that I was careless with money, but, as far as I was concerned, ‘frugal’ might as well have been a kind of fancy mushroom from Woolworths.
After all, there was always another ‘end of the month’ just around the corner. Right?
But with fun-employment on the horizon, I was again plunged into the cold-water panic that had frozen my first foray into freelancing. What was I going to do about my monthly expenses? What if my clients decided to pay me in Mauritian rupees? What about tax?
Sweet Jesus… What about tax?
Once my resignation was official, I spoke to my financial advisor who- wide eyed and not entirely convincing- told me I was ‘making a great decision’ by deciding to go on my own.
Together we decided that the big monthly payments I had been making into various investments needed to be restructured into ad hoc deposits, as and when I have the money… when I’m feeling flush in other words. He also regularly reminds me to make these deposits into interest-yielding investments before I get the chance to consider a 3 month backpacking trip to Honduras or buying a street-legal Batmobile.
Next, it was my turn to look at my monthly expenses and see what could be down-scaled. I changed my medical aid plan to something with a few less frills, and finally made peace with the fact that I would never need a countrywide gym membership.
Really, Jade, you’re going to take time out of your wine-soaked social trip to Cape Town to go to a spin class? Get real.
I started mentally adding up my groceries. I started buying no name. I checked the price column on restaurant menus first. I ordered tap water instead of sparkling, and I learnt to live without the bubbles.
The work started rolling in, but that old bit of advice about giving yourself a 3 month ‘cushion’ definitely proved true. Although none of my current clients stiff me (anymore), there is still a definite delay between doing the labour and getting the moola.
I’ve learnt that although my income and work load might change month-to-month, my accounts need to be meticulous. A tough task for a girl whose High School Accounting textbooks are filled with cartoon pigs and Placebo lyrics. If I want to get paid on time, I need to get my invoices in before my clients’ payment cycles, send regular statements, chase up remittances, and keep records of every cent in and out of my little ‘business’.
The lowball target amount I set for myself as a way to make sure I was covering the necessities (like rent, cat food, wine and internet) has been a great guide for how much I should be making every month, and, more importantly, how much I should be spending.
I pay upfront for services whenever possible, and as far in advance as is prudent… and of course there’s that financial guy calling me every few months to put all my hard-earned money into unit trusts. That jerk.
Almost a year after shaking off the shackles of my 8-5, I feel like I’ve almost got it together. I’m still wary of committing to any additional monthly expenses, but I can indulge in the occasional night on the town (complete with long-suffering cab driver), or an unsupervised trip to Woolies.
Feeling flush as a freelancer is no longer an excuse to buy shots for everyone at the Colony Arms, but it is an opportunity to plan ahead.
In your pyjama pants.
I mean, there’s got to be an upside to all this planning.