By Megan Ritter
About the author: Megan Ritter is a graduate student at USC and has worked for various marketing institutions. Follow her @megmarieritter.
Budgeting and managing personal finances can often be a pain,
but for the freelancer and self-employed, those aches are sometimes more than
your typical aspirin can handle. From an outside perspective, professional
bloggers and other home-based authors might seem to have it made in the shade,
but there is a lot more to working for yourself that meets the eye, especially
from a financial viewpoint.
Sure we might spend less on gasoline, perhaps not as much on
proper work attire and other daily work-related expenses, but time spent on
money matters and and other issues sometimes can make up for that ten-fold. The
pros and cons for this list are seemingly endless, so let’s concentrate on a
few tips on how professional bloggers can best manage their expenses.
Incoming and invoicing
Probably the most important aspect of finances for the
freelancer is managing invoices to ensure the author is being paid in a timely
manner. If not already using an application such as Excel, there are other low
cost accounting services available for invoicing on the internet.
For tackling this task one might first think of Quicken or
Quick Books, but check out some other lesser known vendors like freshbooks.com
or wave’s
cloud based service. Find the program, software or website that works best for
your managing your invoicing and accounts receivable.
Outgoing and overhead
On the flipside, as anyone who has followed a personal budget knows, you have to pay the
bills. But more importantly, you also need to track your expenses. Most
accountants will recommend having a separate banking account for your
professional income and expenses. This will make it much easier when it comes
time to filing taxes.
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| Effective tax planning helps lower self-employment taxes |
Uncle Sam the tax man
When April 15th rolls around, it is vital that our financial
ducks are already in a row so that we are not hit with unexpected charges from
our state or federal authorities. If you will be filing these taxes yourself,
this could be a complicated endeavor.
You may wish to consult with a professional so that they can
guide you through this complicated minefield of tariffs and other unforeseen
expenses. There is much to consider
above and beyond 1099 income and self-employment taxes:
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Important deductions and write offs
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Health and life insurance costs
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How to pay yourself properly
●
Retirement planning
Even if you don’t hire an actual accountant on your payroll, it
might be best to have an initial discussion with one of them to plan your
finances accordingly.
Enjoy yourself!
Even though it may seem that the freelancer is just that, free,
but often we are bound by deadlines and overloaded with work, so it is
important to take some much needed time off and engage in things not associated
with a keyboard. Sometimes a hobby or weekend away can lift our spirits and
drain some of that stress from our daily grind.
While we may dream of writing a best-seller one day, many
of us are content to earn a decent living from the comfort of our home. Staying
on top of our finances can mean the difference between enjoying daily writing
endeavors and dreading our financial future.
About the author: Megan Ritter is a graduate student at USC and has worked for various marketing institutions. Follow her @megmarieritter.
Image licenses: 1. ShutterStock.com; 2. ShutterStock.com
