Money and Finance: What should freelancers prioritize?

money and finance

It is great to know that the number of online professionals in the Philippines is growing. This fact is proven by the number of facebook groups and courses being built to help spread the information about the possibilities of working from home and the benefits that come with it.


As a freelancer myself, being location independent and being able to take care of my kids better are two main reasons why I enjoy working as an online professional. And then, there’s the monetary aspect.


Some people would ask me, “So, do you really get to save more with your current job now, online?”


Well, it depends.


Being able to save more and manage your finances better, is really independent of the type of job you have and more dependent on your values towards money.


I mean do you set aside some amount from your income first before you spend it? Or do you spend first and save whatever is left? If you’re more like the second type, then I’m pretty sure that more often than not, nothing really gets saved after all the spending right?


I know this for a fact because I used to be like that. I would just wonder how come I never get to save anything. I let my emotion rule my relationship with money. I succumbed to instant gratification rather than delaying it and this is why I find myself in the seemingly endless cycle of living from paycheck to paycheck.


And then I realized all of this is happening because of my lack of financial education.  I mean we weren’t really taught in school about how to handle our finances right?


Breaking Out of the Cycle


I knew I needed to change my reality and the first step towards achieving that is acceptance.  I accepted the fact that I have bad financial habits and second, I acknowledged that I needed help.


So I went ahead and read as much as I can about personal finance. I also attended a few workshops and joined Truly Rich Club just so I can surround myself with like minded individuals.


I can say that I am now in a better financial situation, and if you are someone who’s still having difficulty with handling your finances, then allow me to share a few things I have learned that are crucial in order for one to break out of the cycle and be in a healthier financial state.


1. Get insurance

Your greatest asset is yourself.  Some people immediately associate insurance with dying and they feel negative towards it that they don’t bother getting one.


If you are the breadwinner in the family, the more you would want to be insured simply because the premiums from the insurance are what will allow your loved ones to continue on living (in the current lifestyle that they have), even after you’re gone.


There are options to tie in insurance and investments, but it’s best to talk to a financial adviser for that one. But at the very least, get insured.

2. Eliminate bad debt and avoid it

There’s bad debt and good debt, but for the purpose of this blog post, I will just focus on bad debt which is anything that gets money out of your pocket.


If you are debt free, then that’s awesome. If not, I suggest you create a debt repayment plan and really stick to it.


Getting your bad debt to zero is that fastest way I know to get some positive cash flow.


3. Have a rainy day fund

More commonly known as an emergency fund, this should be at least 3-6 months worth of income that is set aside to be used for emergencies like a leaking faucet, unexpected car trouble or health emergencies. And no, the last minute sale by your favorite mall chain is not considered an emergency. 🙂


This fund should be fluid or easily accessible so a savings account is the best option for this.


4. Increase cash flow 

How do you increase cash flow? I did this by educating myself. I took courses that I know will help me improve my craft and be an expert at it. Being an expert in one thing allows you to charge a higher rate.


So figure out what is your “one thing” and be great at it.


5. Live within your means

A bigger income equals to bigger spending capacity and if you have been living in a scarcity mindset, it will be so hard for you to control the urge to splurge on impulse.


I think discipline is the key to achieving this. Have your goal of financial freedom so clear in your mind, that when the urge to splurge kicks in, you’ll be disciplined enough to ignore it.


I am not saying you should not reward yourself, all I’m saying is that you should be aware of when the spending is getting too much already.


When in doubt, I ask myself, “Will buying this bring me one step closer to my goal of financial freedom?”


6. Invest 

We need to invest our hard earned income in financial instruments that have a higher interest rate than the inflation rate. Your money will never grow if you put it all in a savings account. There are other financial instruments that offer higher interest rate like bonds, mutual funds or even the stock market.


I suggest you do your research first to know which financial instrument will be best suited to you and your situation.


What I did is I researched about a mutual fund company I liked, then I got in touch with one of the fund managers to get a better understanding of how the product works.  So talk to the experts first, read about it and just educate yourself.


Educating yourself is the best way for you to make an informed decision on what to invest in.


As Kim Kiyosaki says, “Money can free us or enslave us.”  Wouldn’t it be great to someday be able to work less because you already have a passive source of income? Wouldn’t it be great to someday be able to have money working for you instead of you working for money all the time?


And wouldn’t it be great to someday be able to change your financial situation?


What if that “someday” can actually be today? All you have to do is educate yourself, implement what you’ve learned and practice.  I know you can do this, you just have to have a big enough goal and a big enough dream, so that when things get hard you won’t quit but instead, you’ll press on because you know what it would cost to not achieve that dream.


So there you go, I do hope you were informed by this post and if you know someone who can benefit from this, please feel free to share.

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