6 Best Money-Saving Tips For New Freelancers

Posted by Emily Rhodes on March 19th, 2024

If the job doesn’t work and you decide to build a career as a freelancer, finances remain the biggest concern. Why? It is because fresh freelancers struggle with starting up a business with what’s available. They lack enough savings and the modes to get sufficient clients.  Moreover, capturing new clients requires money, dedication and constant engagement.

Amid all this, one could hardly save enough. Thus, freelancers juggle through the best ways to save and achieve their personal and business dreams. If stepping in as a freelancer or are new to it, money concerns follow. Thus, the blog lists the best ways to save money as a freelancer and achieve life goals.

How can new freelancers save money?

For any self-employed, maintaining positive cash flow is crucial. It helps them attempt emergencies, get finance, and counter needs. In freelancing, you may receive clients back to back or simply go unnoticed for months. It’s normal. However, non-earning time impacts your finances. Here, savings help.  It helps you cover up for things that you need urgent money for.  Here are some tips to save money as a freelancer:

1)      Identify the cost of living in your area

It is one of the most important parts of budgeting. Unless you know the cheapest area around, you cannot save much. Thus, analyse the costs of living in your area and compare it with other neighbouring options.

Explore every cost parameter from rent to utility bills and groceries. It grants you a clear picture of the area and living expenses. Moreover, identify the facilities that may help you save some. 

2)      Avoid purchasing new tools and software

Operating as a freelancer is not easy. It requires you to be on top of the tools and software to beat the competition. However, most freelancers mistake this as an expensive venture. You do not need to invest in tools individually. It may prove costly and hamper your savings.

Thus, instead of buying it anew, consider buying it in partnership. Explore your network of freelancers and check whether they use similar tools. Check whether they are in for breaking the costs. If yes, you can save around 50% on such tools. Moreover, it will help you use only authentic software.

3)      Get expert assistance on business savings

You can save money efficiently by managing your business purchases and expenses. Most freelancers struggle with meeting initial business needs like- setting up the workplace and getting clients. Thus, he spends more on finding one individually or through a reference.

 However, it would not help. Instead, get expert assistance on business expense management. It will help you counter only the needful expenses. The expert will help you acknowledge these by understanding your business and the industry you operate in. The cost of hiring one may feel burdensome for freelancers with limited cash flexibility.

However, you may try financial facilities like short-term loans from direct lenders for your needs. It is the best way to finance small and urgent business requirements quickly. You may get the loan by revealing your business revenue, self-assessment report and projects in hand.

4)      Identify tax benefits entitlement

While you file for self-assessment with HMRC, mention every cost related to business expenses.  Generally, self-employed individuals can claim the costs of business expenses with the assessment. However, you must provide proof of the same with detailed balance sheets.

Additionally, self-employed may benefit from a tax-free personal allowance. According to reports, the tax-free allowance for the year 2023/24 is £12,570.  It is for individuals earning income up to £100000. However, individuals earning anything above that may not be eligible for the allowance.

Apart from these, you may also qualify for national insurance Contributions. The percentage you get here depends on your annual trading profits.

5)      Embrace annual plans and subscriptions

If you need affordable utility bills, and subscription costs to reduce the burden, subscribe annually. It is cheaper than paying a monthly fee. It is because if you go with an annual payment, you only pay one-time costs.

Alternatively, the costs may change periodically because of economic crises or any other issues with monthly payments. If you struggle to pay the lump sum payment, check 12-month loans from direct lenders, respectively. You may use it to cover the costs and pay in instalments. It is because this way; the loan becomes affordable.

6)      Review the market rates before charging

Most freelancers new in the industry face stiff competition against the established ones. Hence, they charge feasibly less for the services they provide. However, it is not justice. Analyse the market rates for the services you provide. Check according to the expertise and skillset you share. Charge reasonably according to your findings.  It will help you charge more than initially and hence save some money.

Bottom line

These are some important financial tips for freelancers or self-employed to save. Analyse your financial situation before stepping in as a freelancer. Identify the investments you must make to grow your business and clientele. It will help you counter the amount you must save. Thus, you can utilise the above tips to save according to your needs and potential.