Arizona Tribune - OneMain Financial: How to Create Financial Goals as a Freelancer

That said, freelance work has a few downsides too. The lack of a fixed income can make budgeting and financial planning difficult. Here are a few tips to help freelancers meet their financial goals.

Prioritize debt repayment

Freelancers typically re-invest their profit back into their business, but for those in debt, this approach may not be ideal. Debt incurs interest, so the interest can rack up quickly if multiple debts exist, like outstanding credit card balances, personal loans, or pending utility bills. This can leave unprepared solopreneurs juggling multiple payments each month. One path to streamlining debt repayment is through debt consolidation.

Debt consolidation combines multiple debts into one loan, enabling the borrower to make just one payment monthly. If the new debt offers a lower interest rate, the borrower can save more on interest over time.

Keep pricing competitive

Pricing determines a freelancer's income, and unlike standard jobs, there's no room for a bonus or a performance raise. That's why all freelancers should prioritize research to ensure their prices align with the current market rate and experience level.

Freelancers should update their pricing often to ensure they are bringing in a decent amount of revenue each year. It makes sense to charge more for specialized knowledge or skills, especially for niche industries or projects. On the other hand, for more common services, pricing can be flexible, depending on the client's needs. It also helps to compare competitors' pricing, so they're not lowballing their products and services.

Create a separate business budget

Many freelancers operate their businesses with their own income. Separating their personal finances from business revenue helps entrepreneurs see their business' profitability and expenses clearly and enables them to make better financial decisions.

When creating a business budget, start by adding up earnings over the past year to identify the business' annual business revenue. Consider the total business earnings and not just profit. Then subtract costs like work supplies, insurance, third-party services and rent for a workspace. A positive number indicates a profit, while a negative number may indicate a loss. If the business is turning a profit, consider setting aside some money for a business contingency fund. If it's operating at a loss, this may be an opportunity to cut back on spending.

Plan taxes efficiently

Since the business will require payment of self-employment taxes, freelancers will need to set aside some funds to pay taxes. Self-employed freelancers or solopreneurs will pay income tax and self-employment taxes on any income exceeding $400. Working with a tax professional or using a tax calculation tool can make the task much easier. Freelancers may also need to create profit and loss statements to help with tax filing.

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About OneMain Financial

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OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.

CONTACT:

Sonakshi Murze
Manager
[email protected]

SOURCE: OneMain Financial

View the original press release on ACCESS Newswire

J.Gomez--AT