Freelancing is a tough business. From chasing jobs, to chasing paychecks; the freelancers financial life can seem like a real roller-coaster, but it is important to note that there is help out there for all freelancers in the form of a financial planner.
Now some freelancers may not know the right time to hire a financial planner or if they even should, but it is the professional opinion of Jason Vanclef that freelancers should consult with a financial planner before they have even started to work. This is because many freelancers do not have the first clue how to manage their money or what their financial obligations are as a freelancer.
In Jason’s expert opinion, freelancers should have the following issues resolved before they begin on the journey as a freelancer.
Freelancers do not know what their tax obligations are
Many freelancers are unaware of their tax obligations. With the help of a financial planner from day one, the freelancer will be able to account for future taxes owed, including their Social Security and Medicare payments.
Freelancers do not know what tax breaks they may be eligible for
If a person earns under a certain amount of money, then they are not required to file taxes. Also, there are several business expenses one can write off in order to lower their tax obligation. With a financial planner, these items can be accounted for and a plan made.
Freelancers need a clear budget in mind to maximize profit
A financial planner will help a freelancer explore all areas of the business and assist them in writing up a clear budget that includes setting aside money for taxes, expenses and savings. With a careful budget, a freelancer can see a greater profit margin.
Freelancers need a business bank account
If one is going to be a freelancer/independent contractor, it is imperative that they have a dedicated business account. If one were ever to get audited, it would be a nightmare for the freelancer and the IRS officer to pick through mixed accounts. It is just good business sense.
Freelancers need an outlook on their business
For a freelancer to move forward with a business, they need to see the bigger picture. Where is the business going? What are the 5 year projections? Is the market in their field flooded? Do they have any money to start the business with? These are all great questions, and the answers will determine whether the freelancer has a viable business model. Success comes through failure, but you have to be able to try, before you can fail. Jason has heard countless stories of times where clients could not answer basic questions about their business, or even identify a profit loss statement. And these were well established freelancers with failing businesses who were coming for financial help 5-10 years down the line. Think about what their outlook would have been like if they had come to someone like Jason from the get go? Where would they be now? Would their business have been more of a success? Don’t let yourself be a victim of poor planning, visit a financial planner.
It is the expert opinion of Jason Vanclef that all freelancers should consult with a financial planner from the get go if they want to succeed. Freelancing, no matter the field is a tough business so you want to be ready financially so you can focus on winning clients over your competition. With careful financial planning, a freelancer can build a sustainable freelancing career and perhaps one day may even hire other freelancers like themselves
