I’ve been working as a full-time freelance writer in New York City for almost two years. One of my favorite things about my job is that I have full control over my day-to-day.
Of course, client deadlines always take priority and I constantly make an effort to stay on-call and answer emails — but for the most part, my schedule is pretty flexible.
That said, when you don’t have the structure that comes with a traditional corporate job, it’s up to you to manage all aspects of your business and lifestyle needs. This is especially true when it comes to finances.
As a freelancer, the line between your personal expenses and business expenses isn’t always clearcut. Your budget can become muddled and so could your understanding of how much you’re bringing in each month. This can create a number of problems - especially during tax season.
Thankfully, there are a couple of simple strategies you can use to make managing your day-to-day responsibilities easier and more efficient.
Use a Planner
Using a planner to write out your day is one of the most important ways to keep track of goals and manage both your business and personal life.
A planner can help you visualize how your time is broken up - enabling you to stay efficient, productive and less stressed. It also helps with maintaining a sense of work/life balance - something freelancers usually struggle with.
It’s worthwhile to start off each day by outlining a rough schedule and do-to list. Make sure to also write down important dates - such as client meetings, invoice due dates, project deadlines and of course - due dates for paying estimated taxes.
Track Business Expenses
It’s critical to develop a way to track your business expenses and personal expenses. Doing so will help you understand how your money is moving and help you prepare for tax season.
There are essentially two ways you can accomplish this. The first is by maintaining a separate business bank account and personal bank account. This can be a great way to divide up your expenses and keep your finances organized. The only downside is that it can become inefficient to keep transferring money between different accounts.
Another solution is to bank with Lili, the banking app built for freelancers. Lili automatically tracks your business and personal expenses in real-time. They also generate expense reports which you can use to review your spending habits and prepare for taxes.
Save for Taxes
When you don’t have an employer automatically withholding income tax, you’ve got to set aside those funds on your own. It’s helpful to keep an additional savings account or use a banking tool that allows you to put aside the extra cash.
Take freelance banking app, Lili, as an example. They allow you to automatically set aside a percentage of your income into a designated Tax Bucket. Lili also has a free tax calculator to help you stay informed and avoid overpaying estimated taxes.
Use the Tools
There’s a lot of benefits to freelancing - having control over your day-to-day, a flexible schedule and maintaining independence. Nonetheless, freelancers face a lot of unique challenges. It’s easy to get overwhelmed when you’re juggling work, finances, taxes, your personal life and running your business.
It helps to have tools that organize and simplify your essential financial needs. Whether it’s expense tracking, automated tax savings or early paycheck deposit - Lili can help. The best part? There are no account fees or minimums.
Learn more about specialized banking for freelancers with Lili here.
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