Friday, February 27, 2015

Why the "Little Pleasures" That You Allow Yourself Might Be Hurting Your Cash Flow

As a freelancing professional, you work hard and are extremely dedicated. You always think of ways to craft a marketing strategy to attract new clients. You return your clients' calls as soon as possible, and you submit your work promptly.

But here's the deal: you realize that while "dry spells" are happening a lot less often in your career, your cash flow could still benefit from, well, a few tweaks here and there.

Plenty of people have aspired to turn freelance, but the ones who manage to stick and thrive in this business of being your own boss did several things radically. There will be a time when projects and assignments fly left and right, raising your confidence in your abilities and earning capacity.

But beware. This self-confidence might border on complacency, leading to a lack of budgeting and planning your finances.

Here's what you may need to do if your savings aren't as huge as you'd like it to be: evaluate your spending habits and see if you've been spending on items that may not cost a lot, but when added up after, say, a month, three months, or even a year, would have put a huge dent in your income.

To illustrate, when I started supplementing my writing with designing and selling greeting cards in 2007, the money came pouring in in ways I could never have imagined. I hit a nerve among employees in a corporate office that needed my prototype paper product, the gift card, and I found myself with a constant supply of jobs. 

I set aside small amounts with every sale, but I didn't think twice about shelling out Php200 on a thin-crust pizza and Coke every time I went out to replenish my supply of cardstock. My magazine reading habit reached an all-time high at that time, too.

For other freelancing professionals, three-figure lattes or having a sweet snack all too often might be the culprit. And think about this: a bag of potato chips might not cost much at Php14-Php16, but if you buy two bags a day, seven days a week, you would have spent roughly Php224.

So what's the solution to these "little holes in a freelancer's ship that might cause it to sink"? I'll give you a hint: it doesn't involve depriving yourself. Next week I'll give you practical tips on how you can enjoy on a freelancer's wages.

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