Photo by ninjapoodles.

Maximizing productivity is a never-ending task for most freelancers. There’s always some way that we can improve or some area that’s lacking the attention it deserves. This post serves as a guide and a reminder for ways that we can get more done and make better use of our time. Feel free to add your own suggestions in the comments.

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Photo by SqueakyMarmot.

I’ve been a freelancer full-time for over 6 years and a credit card holder for about 8 years. I love being able to set my own hours and being able to only work when I want to. While others face a hassling commute and complain about their daily grind, I enjoy a work situation I love.

The one downside, of course, is that with freelancing, finances can really be up and down. It can make credit cards more than a little tricky. By making most of the mistakes it is possible to make, I have found that freelancers should be careful with the plastic and keep the following in mind:

1. Look for other types of credit. As a freelancer, waiting for that check can sometimes be hard. Not all clients are prompt in paying you, and that can create problems. Clients may be tardy, but your bills still have an annoying tendency to be due at the same time each month –- whether you are getting paid or not. Credit can be one way to make sure that you can fill any financial gaps, but just because you need credit does not mean that credit cards are the best option. Lines of credit can be more flexible and far less expensive, for example. If there are times when you know you will need to borrow to pay your bills, be sure to select the best credit option.

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Photo by seier+seier+seier.

Buying your first home can seem intimidating and scary, especially when the news is full of talk of mortgage crisis, and especially when you’re a freelancer without a steady paycheck to rely on. In fact, it can seem downright impossible.

The first time I was looking into buying a home, it was with my boyfriend: a nice, steady, engineer-type with a full-time job. I was freelancing lots of small gigs that added up to a nice income but didn’t look very reliable on paper. But we figured that with his undeniably reliable paycheck, a bank could be persuaded to give the two of us a mortgage.

Well, instead of buying our first place together, we broke up, and to me it looked like my hope of owning a home was gone, too. Sure, I was making money, and more every year, but like many freelancers, my income was erratic. I never had any idea what I would be earning more than eight weeks out. To make things worse, I had credit card debt and had been late a few times on bill payments. Plus, I’d never heard of a freelancer buying her own place without also hearing that her spouse had a steady job, or that the freelancer’s career was bringing in six figures.

Neither of those descriptions fit me, and wouldn’t anytime soon.

So, while I was digging into pints of ice cream mourning a broken relationship, I was also mourning the broken dream of homeownership. As far as I could tell, I was either going to have to wait for a (corporate) knight in shining armor, or save my pennies for about 20 years. Yeah, good luck to me. Continue Reading

Photo by Powi

You know that commercial where the two girls sit around eating their yogurt and talking about how “it is sooo good?” Yeah, I hate that commercial.

But you know what? Freelancing in the U.S. economy has been good to me lately.

“It’s like, $4.00 a gallon gas good!”

“No, no, it’s like write-off your new laptop good.”

Kind of like that.

Thinking of making the freelance switch? Here are a couple reasons why you should buck up and go for it, recession and all. Continue Reading

Photo by ^Vanessa^.

You’ve heard it before: “live within your means,” “a penny saved is a penny earned,” “don’t break the bank.” But do you actually put those ideas into practice? Or do you just pull out your plastic, figuring you can write it off at the end of the year anyway?

I used to roll my eyes when my parents lectured about money. But now that I’m writing full time, I consider my Yankee upbringing to be a blessing. With a recession looming in the United States, it’s time to get serious about saving money in your personal and professional life.

Heres’s how to get started… Continue Reading

Photo by decor9.

This post is the first half of our two-author, two-part series on smart saving.

Many Freelance Switch readers are probably aspiring professional freelancers with a day job. Shama Hyder earlier provided 5 steps for switching from side gig to full time. There’s one really important step that Shama alluded to and that I’d like to expand on: savings.

Before you jump into full-time professional freelancing, you want savings. (Read further below for an explanation why, beyond the obvious.) Do not venture into full-time freelancing without savings.

General Savings Tips

1. Save for the future.
   Don’t save for next week, next month, or later this year. Lean periods in freelancing careers can and do ruin marriages and family relationships. Think like a business owner, not like one person constantly looking for freelance work. Use longer-term investments such as bonds or blue chip stocks (that you’ve researched well). Continue Reading

Image by Claudecf.

You may have heard about the Pareto Principle, or the 80-20 rule, before. It holds that 20% of causes result in 80% of outputs, 20% of the work causes 80% of the results, 20% of the clients yield 80% of the profit, and so on. The percentages aren’t exact, of course, but the basic premise (that a small percentage of what we do yields most of the results) is an incredibly useful analytical tool for your business.

If you want to learn how to apply the 80-20 rule to client liaison, your choice of clients, your prices and the work you do, this article will explain how to do that. 80-20 freelancing could allow you to do less work while making the same amount of money. If you’re lucky (and savvy), you could end up increasing the profitability of your business by doing less and focusing only on what’s important. Continue Reading

This post is a guest post from Allan Branch, a one time freelancer who created LessAccounting for freelancers who need to keep track of money or send invoices.

What if someone could sue your company and then, since your company has no money, take your house or win a judgment that takes you fifteen years to pay? The Corporate Veil provides protection against this happening to you.

What is it?

The Corporate Veil is the legal shield that protects an individual from being personally liable for the actions of his/her company. This only applies to owners, partners, board members, not employees or share holders. In this country a person, or a company may sue any other person or company for anything, at any time. But there is only one reason to sue, and that is to be awarded money. So if a person or company doesn’t have any money, then there isn’t really anything to sue for. Continue Reading

If you’re like me, your bank account tends to live by the seat of its pants. Money comes in, money goes out, records are a bit of a blur. And of course a freelance lifestyle doesn’t tend to help either, with its occasional large sums of money and long droughts in between payments.

If you were to ask what my personal brand of financial plan is, I would have to say it’s something like: try to earn so much that it doesn’t matter too much if I have a financial plan. Well as anybody who actually has a bank balance will tell you, that’s a dumb plan. So as of today I’ve decided to do something about this somewhat grave situation, before I have children and mortgages appear to make it all that much harder.

Fortunately for me, web man that I am, there is pretty much everything I need online. This morning I sat down to compile a toolkit for getting my personal finances in order. Since some of our freelance audience will no doubt be in the same boat as me, here it is for your benefit too!

Personal Finance Blogs

I’ve spent 28 years taking my own advice, and frankly it hasn’t gotten me very far. So it’s time to listen to someone else. Here are the best and brightest voices online on money matters:

1. GetRichSlowly

   The big daddy, the big kahuna, the big cheese. Get Rich Slowly has managed to attract some forty thousand subscribers and there’s no doubt why. There is some sharp, quality advice here, see posts like: How to Get Out of Debt and Basic Tips on Tipping (luckily we don’t have tipping here in Australia!). There’s also the odd amusing post like Lifestyles of the Rich and the Stupid (how is that I know that if I ever manage to qualify as the first, that I’ll wind up being the latter)

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By Mathias Meyer

Image from iStockPhoto

So you wanted to become a Freelancer. That’s great! You’re one step closer to more personal freedom and a job you actually enjoy. Here are a couple of things to keep in mind – things I found important to consider when I began freelancing. Of course there are many more, so feel free to add your thoughts in the comments section.

Finances

Your finances are the most important issue to consider when starting out. You’re probably used to getting a pay-check by the end of the week/month/year. Not having that is what many people are afraid of when embarking on their freelancing career. Luckily, you will get used to this pretty quickly. You just have to approach your finances differently. The most important thing is to always have enough money in your bank account to allow you to live for the next couple of months, even when it seems the work is rolling in.

Taxes are an important part of accounting that many overlook in the early days. It’s tempting to spend all the money you get, but it’s important to keep in mind that someday the tax office will want its part of your income.

In order to avoid being trapped in the pitfalls of your tax system, I highly recommend getting an accountant. It’s generally not too expensive and allows you to focus on what you’re good at. At the beginning of every month I collect my bills, drop them off at my accountant’s and wait for her to tell me how much I have to transfer to the tax office.

However, it is possible to take care of your finances without the help of an accountant. If you have the time to spend on your accounts (and a mind that bends well to these things) you can have a far greater control and insight into your financial situation. The most important thing is to be realistic – if you know you’re not the accounting type, get an accountant straight away. Hiring an accountant at the beginning of your freelancing career will be far less expensive in the long run than fines from the tax department and hiring someone to sort out your abysmal records.
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