It is not a lie that the subject of money is something that has been shied away from for a very long time in many cultures. Unless a person wants to know about money and how it works, they would have had to go on a money knowledge hunt and if that is not enough, they would have to find out on their own how they can make this work. Aside from dealing with the hustle of evolving in your mind and output as creative, managing finances is another facet to pay particular attention to. Being creative alone does not get you supper every night, knowing how to manage your finances helps you run things smoothly and seals that fulfillment and happiness you get from doing what you love. Here are six(6) tips you can use as a creative to manage your finances.
- Prepare an income statement so you have a record of all the income you make as a freelancing creative. It is important to have a clear look at how much money is coming to you per the jobs you do, and how that money is being used. The flow of income is what helps money accumulate and grow. Money management skills, additionally help us put that money to good use so it grows and grows, over time.
- Take note of all the expenses involved in executing a creative project, be it transportation fare, data bundles or cost of tools and equipment. Cash flow is an important part of personal finance management and is the amount of money left at the end of each month that can help you attend to emergencies and unforeseen circumstances. For instance, if you want to calculate the cost of data spent per project, multiply your monthly data bill by the number of projects you have lined up per month.
- When setting the rates for your creative services, include operational expenses (costs required to fulfill projects) in your invoice. This protects you against the possibility of running a loss by using your own money on administrative tasks that weren’t accounted for, instead of using the client’s money.
- Set aside a portion of your monthly profit to reinvest into your business. These retained earnings can go toward paying for professional courses to boost your skill sets, new technology and tools for work. These reinvestments go a long way in making you and your business far more efficient and satisfying to clients.
- Pay yourself first. This is a lot to take in if this is your first time hearing it. Yes, you’re a small business and you are just starting out but that does not mean you get to give everyone else your money without leaving anything for yourself. Sort out your personal expenses such as food, transportation, bills and utilities, after which you address other major needs. This will also give you financial resources that are separate from your business, thus prevent you from dipping into your business’ finances to take care of personal needs.
- Execute on your personal savings and investment goals. While setting up a business can be promising and exciting, it is important to take note of your own financial plans for the year and see to it that you can mange your finances now, while preparing for the future. The best time to save and invest was yesterday. The second best time, is now.