Being self-employed sounds excellent – you get to set your hours, decide the work you do, and be your own boss. What more could you possibly need? But still, it’s no walk through the park. Many people aren’t able to get a grasp on the financial responsibility that comes with being self-employed.
The recent unemployment spike pushed many people to explore their abilities. Some turned to self-employment out of necessity, while others enjoy having a passive income. Whichever group you identify with, you certainly need to understand the dynamics behind earning money through freelance to manage it better.
Research Market Rates
Before jumping into freelance, you need to determine the current market rate for the service you are providing. For example, if you are a consultant of any kind, you need to know how much your peers charge. You wouldn’t want to charge a client $200 for the same services that other consultants are charging $150 for – at least not until you’ve made a name for yourself.
If you are working in a field where no base amount is set, you can figure your charges out by taking into account your personal expenses, tax payments, and the amount that will go into your savings.
Nothing Is Free in This World…
…especially not your services. Once you start your freelance journey, many clients might want you to do some work in exchange for “exposure”.
This is them trying to get their work done without paying a dime so, you must carry out all the formalities before taking on any work. This will include you discussing the pay rate and payment deadline, with everything summarized in a binding agreement.
Hiring an Accountant?
Once your operations start, there’s going to be lots to consider in terms of finances such as the receipts, invoices, and whatnot. While many people would suggest hiring an accountant who manages finances for you, it is of note that many free apps that are now available.
These apps are good and helpful when it comes to collecting data. However, unfortunately, they won't help with the hard labor. At the end of the day, you decide what kind of help is required according to your needs.