Many of you have transitioned from being full-time employees to freelance workers, but during that transition, you lost some direction. You may have been spending more time on client work than planning your own future, but we have some easy tips to help you get ahead while freelancing, even if you feel behind.
Manage the day-to-day
Your day-to-day tasks as a logo designer or freelancer are either going to hold you down or ensure that you develop smarter processes. We have some ways to help you develop those processes so you don’t bury yourself under needless tasks.
Use a business management app
Whether you’re managing client expectations, working on projects, coordinating with freelancers, or looking for new clients, you’re going to want an app that can help you with all of it.
Apps like Dubsado can help you track clients, manage payments, track projects and work with subcontractors, and automate email messages to clients. It’s sort of a one-and-done system that can help you manage client projects, needs, and invoices.
Like Dubsado, 17Hats is a business tool to help freelancers and entrepreneurs manage their business better. It will help you automate questionnaires, create to-do lists, use email templates, track your time, and invoice with ease.
Trello, or Asana can help you keep your projects in order. If you’re a freelancer, you may not have a project manager there to help you organize everything. Apps like Trello and Asana can help you schedule to-dos, organize daily, weekly, or monthly tasks, and hit your professional goals easier.
Jumpchart is a free web planning app that can help you manage client projects, lay out your web content, and coordinate with your colleagues. We love it for organizing larger content-based products, but it’s great to use in conjunction with the apps mentioned above.
Get your expenses and savings in place
Use an app like Xero, Quickbooks Self-Employed or Freshbooks to make tax time an afterthought. You can hook up your bank accounts and create rules so your expenses are auto-labeled, track unpaid invoices, accept payments, and organize your income.
Save for retirement
Open an IRA
An IRA is a great way to save while working as a freelancer. As a freelancer, you can open either a Roth IRA or a SEP IRA.
With a Roth IRA, you pay taxes as you make your contribution, but you’re not required to pay taxes on your contribution if you pull it out during the proper age. If you pull out your money early, there is a 10% penalty, though there are some penalty-free ways you can access your money: if you’re buying your first home, if you become 100% disabled, or you’re using your IRA to pay your health insurance premiums while you’re unemployed. Talk to a CPA to get started with an IRA or to withdraw funds from an IRA.
According to David Kempe, the owner of Kempe Tax and a CPA, the SEP IRA might be the way to go:
“While a Roth IRA is a great idea, the amount you can contribute is limited to $6,000, with added catch-up contribution of $1,000 if you are over 50 years of age. With a SEP–IRA, you can contribute up to $56,000 for 2019 ($55,000 for 2018), but the contribution cannot exceed 25% of your net earnings as a freelancer. A SEP–IRA is tax-deferred, which means you get a tax deduction for the amount contributed, and the money earned in the SEP–IRA is not taxed until it is withdrawn.
SEP–IRAs are inexpensive, easy to set up, easy to maintain, and do not require annual IRS filings like 401(k) accounts. Further, you have until April 15, 2019 to set up the SEP–IRAfor 2018, AND that deadline can be extended to October 15, 2019 if you file an extension on filing your tax return.”
Set up automatic savings
Full-time workers might have an edge-up on freelancers, but that’s just because most of their hard work is automated. They don’t have to hide away money for quarterly taxes, their employers might match their 401Ks, and they might save on perks like gym memberships or meal plans, but it doesn’t mean that freelancers should stay behind.
Once you determine what you want to save for, you can set up automatic savings monthly. Filter money into the following accounts based on the Profit First method, which posits that Sales – Profit = Expenses.
- Owner’s Pay
You don’t have to rush to your bank and get really detailed, but you should set up a method that makes it easy for you to save.
This video gives a great way to ease into the Profit First method.
Before you actually separate your finances, you’ll want to assess your income”
Then you can do the following:
- Pay your profit: 2%
- Send 30% to owner’s page
- Send 15% to taxes
If you make $100K per year, you should allocate the following numbers:
Owner’s Pay: $2500/mo
The more often you do this, the easier it will be to invest in your busines, and eventually, save.
Get disability insurance
If you don’t already have disability insurance, it’s a good idea to get it. Sharon Epperson, the Senior Personal Finance Correspondent for CNBC shared her top money tips with the Secrets of Wealthy Women podcast, and she suggests that you should pay for disability insurance. Jean Chatzky, NBC Today’s financial editor, agrees, and adds that single women, especially, should get disability insurance, even in their 20s.
You never know when a health problem can strike, and health complications from child birth, on-the-job work, or surprise health scares can plummet your savings. Disability insurance will help you stay safe in case of these types of emergencies.
Negotiate your rates
Whether you’re working on getting a long-term client on retainer or you’re hoping to secure single projects, make sure you negotiate your rates.
Don’t work for hourly rates
Listen, it’s been said before. Hourly rates can kill your business.
Hourly rates cap your income: You can only work so many hours in a day, right? So even if you charge $100/hr, you’re still capping your income at $100/hr x the hours you can work in a day. So you can make $800/day. That’s great, but what happens when you want to grow? The hourly income isn’t going to cut it.
You get penalized for working faster hourly income is cool if you work super slow, but what if you work quickly? Getting paid an hourly rate will keep you from growing and requesting what you’re worth.
Ask for a raise
Let’s say you’ve been working with a client for some time, but you’re interested in getting a raise. You can use the same tactics that full-time workers implement. According to The Cut, once you understand your worth, you should be able to easily ask for a raise.
Understand market rates for your position
Take stock of your skills including any education, classes, and work experience
Take stock of your responsibilities and how they’ve grown with your client
Know when to negotiate and negotiate after you’ve proven your worth
Provide examples on why you deserve a raise
Get an accountant
How many times should we say this? An accountant is a good idea. We think so. The Creative Independent thinks so. If you’re freelancing, you need an accountant. Xero explains that an accountant can “keep control of your tax obligations, identify savings, and help you grow your business,” but we think they’re really great because they’ll help you organize your books and uncover missed tax breaks. Who doesn’t like a tax break?
Connect with coworkers and community members
Many remote workers feel that lack of coworker collaboration is one reason for workplace dissatisfaction.
Slack will allow you to communicate with your coworkers. Shoot them a quick message, collaborate on larger projects, and use fun bots to ask each other questions and get to know your team members.
Realtime Board is your go-to for hosting meetings when you’re remote.
Schedule morning conference calls with a program like Zoom and get the skinny on what everyone is planning for the week. Ask your colleagues or other freelancers to share what they’re doing to get ahead.
The Muse wants to remind you that script isn’t dead. Write your colleagues a thank you note, send your clients a little letter, or write to potential clients. You never know what could come of that.
Speak at conferences
Drive growth, expand your network, and enjoy a day out of the office— all at once— by speaking at a conference.
To find conferences you’d like to speak at, go to Google and type in the following details:
Conference + a keyword that explains your industry + location
Logo conferences in Philadelphia
Design conferences in the United States
European UX conferences
Once you find the conference you’re interested in, create a pitch.
How to Pitch an Idea to a Conference
First, read over their requirements really carefully. Some conferences require you to submit formal documentation, others want video applications, and others are on a reference-only basis.
Describe a bit about who you are, what you’d like to present on, your experience with the field, and why they should be excited to have you present.
Then, make sure you have a really good presentation. You don’t need a presentation for every conference you go to, but you do need a single good conference presentation. TedEx has some ideas to help you make a powerful presentation and learn how to become a good speaker before you send your pitch.
So what are you waiting for? Go out there and show the world that you’re more than just passion, brains, and stunningly good at what you do. You’re also good at planning your future.
Kallie Falandays is a copywriter for Jumpchart a platform that makes web planning easy, and Entermotion a full-service web design studio based in Wichita, Kansas.