Making the transition from a corporate job to freelance blogging involves a number of challenges. Even though you get to work when you want to and can take time off at will, there are serious considerations to take into account – primarily keeping your finances in order. Often, blogging results in an inconsistent income and, unless you take proper precautions, you may find yourself searching for another job before you know it. To avoid such a fate, here are several tips to follow:
1. Create a Proper Budget
If you’re going to take the time to make a personal budget, put one together that works. Record accurate amounts for all monthly expenses (including entertainment), and compare it to either an average of your monthly income for the past several months, or to your least profitable month. Be sure to review your budget regularly – if your health insurance increases or your grocery expenses drop, update it. Always keep your expenses beneath your income level.
2. Pay Off Your Credit Card Debts
Too many people are under the impression that solving credit card debt requires permanent, wholesale changes in how money is spent. However, this isn’t necessarily the case. Total up your credit card debts and determine how much extra money you can apply to your debts each month based on your budget. Then, determine how long it will take until they’re paid off. To speed up the process, put yourself on a “spending diet” until your goal is reached.
3. Cut Your Monthly Bills
When was the last time you checked for better prices on a cable TV plan? Do you really need a home telephone? Ever thought about turning down the heat and putting on an extra sweater? It’s these types of questions that, when answered, can save you a bundle on your monthly bills.
4. Mind Your Purchases After Good Months
Whenever you have a particularly good month, it’s very tempting to overspend. Giving yourself a little love for a job well done never hurts – just be reasonable. Remember, just because you did well last month doesn’t mean you won’t have a significant shortfall in the near future. Show restraint, and save money for a rainy day.
5. Pay Your Taxes Accurately
Many bloggers must pay taxes on a quarterly basis, and if you don’t, you can be fined by the IRS with a penalty. To properly estimate your taxes, use the IRS Publication 505. Make sure you are taking advantage of all applicable tax deductions, such as the home office deduction. Just be 100% sure you qualify for it before you take it – the last thing you need is an audit.
Diligent money management is especially important as a freelancer, especially if your income fluctuates. Devote the proper care to your financial picture and you can continue generating money from home while living a financially fit life.
What additional personal finance tips do you have for bloggers?
About the Author: Evan Roberts is a social media specialist, blogger and entrepreneur who writes about small business marketing strategies and personal finance.
