Financial headaches that are common for freelancers

There are upsides and downsides of working as a freelancer. You don’t have to answer to a boss, and you decide what work you do. But that’s not the whole story. There are challenges and difficulties that you will face as well.

So, you need to make sure that you are aware of the key financial difficulties associated with freelance working. After all, making money and earning enough to live off is what it’s all about.

Maintaining a Steady Cash Flow

Your cash flow is vitally important when you are a freelancer. When you don’t manage it properly, you face big difficulties. You should try to make sure that your use of credit cards is kept to a minimum because they can confuse things even further, which is not what you need.

You should also try to ensure that you don’t spend too much near the start of the month if you are not getting paid again for a while. These are issues that you should get used to over time as you grow to understand the realities of freelance work.

Chasing Unpaid Invoices

When a client doesn’t pay your invoice, you have to chase them. This is, unfortunately, a very common problem that many freelance workers have faced. It’s something that you should not back down on, though. If a client is trying to take advantage of you, you can’t let them.

Also read: recognizing, dealing and getting rid of annoying clients

The more you let them get away with, the more they will exploit you. So, be firm about expecting payment by a certain date. And when those expectations are not met, take action immediately. Things like invoice factoring might be able to help you out if you are having problems with getting invoices paid too.

Saving for the Tough Times

As you should already know, freelance work is inconsistent. You can never be sure about what your income will be from one month to the next. Of course, you can secure long-term contracts and repeat work.

But even these things are never certain because you can be let go very easily. So, it’s important that you start to save when the times are good. They might not be good forever, and having some savings to fall back on when times are tough can be a real help.

You just need to make sure that you have all of your immediate costs covered before you start to save.

Currency Challenges

When you work as a freelancer, it’s possible that you will be working for clients in different parts of the world. This is one of the things that can make freelance work so interesting.

However, things can get confusing when you are being paid by clients and companies in different countries. There are currency challenges that you will have to overcome. You should be sure to keep a close eye on the currency exchange rates.

Your income can go up or down depending on what the current rate is. Sometimes, it will work in your favour. At other times, it will mean that you lose out a little.