Budgets and savings - boring, but real
It can be said, plainly, budgets and savings are commonplace and commonsense. But, for many of the reasons above, it can be longer and harder for freelancers and self employed people to retain some sense of stability and this is most especially true in the first few years of business. The first budget you will do will likely make you laugh five years later. Savings can often dwindle quickly in the face of the unexpected and it can be very hard to build them back up again. That said, learning how to budget for your business and doing this on a frequent basis is a crucial foundation for the longevity and sustainability of your business.
Not only is it a snapshot of where you are, it is a chance to explore opportunities for growth or to provide clear figures that represent financial stability. And when you know that, you can make it a goal and you can make a plan to reach that goal. Many entrepreneurs will wax lyrical about seed funding and the benefits of debt, but few talk of the power of savings. Savings are a cold, hard, reliable safety net.
Sometimes the capacity to save means sacrificing your own wage or take home which can be a very tough and maybe even impossible decision for business and especially so when starting out. However, when there is a crisis or an opportunity for growth that may need capital of some kind, you will know you can do this and not owe anyone (or pay even more than you need to in the long run) to make it happen. Again, it entirely relies on your individual needs and the needs of your business - which, fluctuate dramatically in freelancer life - but the logic is there, even if it is not as cool as someone else paying for your business.
If you already have debt - that’s also totally fine. You can pay it down with laser focus, or just ensure you are meeting your obligations and sticking to your budgets. In 2019, it is absolutely possible to avoid debt when you are self-employed or freelancer - but it requires a multi-faceted strategy built on the foundations of freelance business we discussed above.
It can be all too tempting to remove the stress of finances and money from our life, but there is always a cost associated with this and it is not a monetary one. In some cases, credit is the only way to expand your business and that is a decision that requires some brutal financial planning and bookwork - but you may find the benefits are in your favour - and expansion is a great opportunity. It will all depend on your individual circumstances but ideally, at this point you are at peace with why one should be in debt and why it is a benefit, and if you yourself can avoid it.