Nicola Balkind

Community Leader

Freelance Finance

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Freelancing & Finances

Let me tell you a story about freelancing and finances…

Last week I returned home from my holiday to find that one of my long-term contracts was being terminated without notice.

Usually, when setting up a new agreement, I specify one month notice from either party. However in this case I had signed the client’s standard contract. I hadn’t anticipated that it’d be terminated early – but when you are a contractor there’s always risk involved.

Fortunately, I’d already been offered a few pieces of work to get me through the end of the year, but I was also prepared in other ways.

Although it’s never fun to lose work, it’s important to plan for the best and be prepared for the worst. With that in mind, here’s my brief guide to freelance finance.

 

How to be financially prepared

1. Forecast your income

My contracts can run for anything from one week to a year, so I track my clients and number of contracted days as I go.

On my wall I have a calendar for the year. Under each month I list my client names alongside the number of days or fee for that month. At a glance I can see how many days are spoken for and how much I’m due to earn.

I also keep a spreadsheet with invoices due, sent, and paid where I can track my income, all of which keeps me right when it’s time to file taxes, too.

 

2. Know your essential costs and income

My basics are rent, bills, travel allowance and food. You may have others, like childcare or a car or a mortgage.

These basic costs amount to an average of £1000 per month. To account for tax and savings (see next point), I need to bring in at least £1400 per month to cover it. (I also work on the assumption that I can and aim to make a little more than that to cover things like clothing, cleaning supplies and maybe even some social engagements.)

Here’s a simple formula: work out your essential costs, divide by your day rate and you’ll have the minimum number of days’ work you need to live. Voilà!

 

3. Set money aside

I have a rule for getting paid: don’t even look at what’s come in before detracting the basics.

For me the basics are:

  • 20% for business savings (these cover taxes and National Insurance);
  • 10% for expenses (this will depend on your overhead);
  • 10-20% for personal savings (depending on how much is coming in).

After those are spoken for, anything over and above your basic costs can go towards the finer things in life.

 

4. Limit stress: have a float

Most sources suggest saving enough to cover your basic expenses for at least 3 months before going freelance.

I have a couple of personal savings accounts: one for fun stuff like holidays and treats, and another as a nest egg / rainy day fund which acts as my float. Having a float is vital for any unexpected expenses: loss of business, illness, a broken computer – you name it.

Let’s be real. When you freelance, you probably won’t have a reliable income. Payments will be late, contracts will break, or other life hazards might get in the way. Unless your business covers sick pay and leave, you’re probably not going to be earning while you’re sick or taking a break. Have a float, save, and plan for those instances and cover yourself for those things large and small.

Knowing you have a float can make setbacks (like the one I’ve just experienced) so much easier to deal with. It can still be a blow to the ego, but I know that financially, I’m fine and I have time to find a new opportunity.

 

5. Don’t kid yourself

Now a general point: have a good relationship with your money.

The worst thing you can do is to be dishonest with yourself about your finances. Even if you think you aren’t “good with money,” you need it to live. You must be good with money to freelance successfully.

 

6. Avoid the time = money trap

Time is money. It’s a cliché for a reason. When freelancing, time often does have a direct correlation with money – but please don’t let it control you. I see a lot of freelancers give up opportunities to work on their business, or just to relax, because they are too busy working in their business.

Know how much you want to make, how much time and effort it takes to make it, and how far you can reasonably stretch it. Save for rainy days and factor in holidays, research days, professional events and any other time-costs you encounter. You’ll be saner for it.

 

Your Turn

Did I miss anything? What are your best tips for dealing with freelance finances?

Do feel free to share them in a comment below, tweet me, or shoot me an email and we’ll chat.

 

I’m available!

As you may have guessed from the story above, I have some availability through 2016. Want to work with me? Get in touch!

How I Dramatically Reduced My Email Load

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email envelope

Occasionally, on Twitter, someone will post a screencap (more like a screamcap, amirite?) of the email notification badge on their phone. Invariably it reads over 100, or in some cases even over 1000. I find this baffling.

Question

How many emails do you get each day?

How many emails do you get each day, really? How many of them are useful?

My Answer

I probably get around 10-30 emails per day.
I get more like 5-8 emails per day, really.

How do you do that?

The trick? It’s to get as many emails that you don’t really need to see to bypass your inbox.

It takes a little work upfront, but like any good system, it’ll save you a lot of hassle (and a lot of red notification badges).

I’m not quite an inbox zero kind of girl, but I do have a few stipulations:
1. No notifications
2. Only useful or to-be-actioned emails stay in my inbox
3. Newsletters, press information and mass emails bypass the inbox.

So, here are some ways that I reduced the amount of email that hits my inbox.

 

1. Unsubscribe

Been signed up for hunners of marketing emails that you didn’t want, or even newsletters you thought you’d read but don’t? Take half an hour to go through and unsubscribe from them manually.

Similarly, unsubscribe from social media-related emails. I can’t imagine a situation where you’d actually email notifications from Twitter letting you know that a spambot followed you. I mean it! UNSUBSCRIBE.

 

2. Unroll.me

There’s this great script called Unroll.me (also their URL) that can really help you to clear out your inbox. It has a few features:

The Roll-Up – Select the people whose emails you don’t need to see right away, and add them to your roll-up. This is a daily digest that gathers together all of your newsletters, or notifications, or other mail that’s low priority.

My roll-up includes business newsletters, addresses that only send me press releases, account-related marketing emails I haven’t figured out how to turn off, bank statement alert emails, and any account notifications that are occasionally useful.

Unsubscribe – You can also unsubscribe from emails within Unroll.me. I prefer to unsubscribe manually and get off people’s mailing lists altogether, but this is a good option for accounts that want you to sign in to unsubscribe, or even to hide emails from press lists or other nonsense emails with no manual option.

 

3. Create rules

Another way I keep my inbox tidy is by creating rules. Often these capture things like press emails that come from new addresses that aren’t in my contacts.

To give an example, one such rule is: If body includes “press” “screening” and “London”, mark as “Press”. Since I’m in Scotland and most of these are irrelevant, I don’t have to worry about missing much. These emails go straight into my “Press” folder, which I only need to check when I’m pitching reviews.

 

4. Use folders

As hinted at above, I have a filing system for emails. This might sound complicated, but you could have just a few key folders.

The folders I find most useful are:
Accounts – sign-up emails, orders.
Accounts/Work – as above, related to my business.
Friends – personal emails.
Work – work-related emails.
Work/[Client name] – work-related emails relating to a particular client or project.
Press – press releases, screening invites, etc.
Unroll.me – automatic folder containing my roll-up items.

 

5. Work on your methods

When I get up in the morning, I check my emails. Anything that has slipped through the net or isn’t important (e.g. an order dispatch notice, or a ‘thank you’ that doesn’t require a response) goes straight into folders.

Only emails that require your attention should remain in your inbox.

Now, most wisdom dictates that you should’t use your inbox as a to-do list. I agree, but I also like to keep relevant emails in my inbox until they’ve been ticked off. If I’m awaiting a response, I’ll file the email away unless I need that reminder there.

 

The result

The result? My inbox stays, if not at 0, under 10.

While my methods might not work for you, I know from experience that making moves to organise your inbox can really reduce your stress levels. It removes digital and mental clutter, gives things a sense of order. Most importantly, it allows you to focus on the important things first.

 

Your Turn

What are your best tips for streamlining your emails? Share them in the comments or shoot me a tweet @robotnic.

 

How I Start

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Getting Started

Last week I published a post on my big sticking point: Getting Started.

It wasn’t until afterwards that I realised that I hadn’t explained how I get over it.

Probably because I started without a plan.

So, here are some ways you can help yourself to get started.
 

1. Define Your To-Dos

If I sit down to work without an idea of what needs done, it’s a wasted day. So I always write my to-do list for the coming week on a Friday afternoon or – if time gets away from me – on Sunday evening.

Defining your weekly overview before the new week begins clears away the clutter of the week past, gives you a solid starting point, and can always be revised over time as things pop up and change.

For me, this means having a weekly to-do list. At the end of each day I write down my to-dos for the next day. If something moves, no worries, it gets copied and pasted to the next available time slot.

Knowing what needs done and when also gives me a deadline – even if it’s just to finish this blog post before my yoga class this afternoon.

Set yourself parameters and keep your priorities front-of-mind.

 

2. Remove Distractions

Close the YouTube tab. Close your inbox. Turn on the Do Not Disturb notifications feature. They’ll still be there when you’re done.

Sometimes if the dishes are looming, the best way to get them off your mind is to give yourself time to get them out of the way. It can be easy to get into a procrastination cycle here, but you know how you have the best ideas in the bath, or on the bus? Doing something productive and meditative can ease you into the right thinking patterns.

For me, it’s often something like watching one video, or doing the dishes.

This also relates to…

 

3. Set a Starting Point

Don’t let a stream of bits and bobs steamroller your day.

Committing yourself to a task that’s a little down the line, and takes place right after a certainty. It can makes a big difference.

So tell yourself: see once those dishes are done? Once I finished this cup of tea? When the postman comes? Then it’s time to start.

 

4. Start a Timer

Some people swear by the Pomodoro technique or variations on it. Setting a timer for 10-20 minutes and challenging yourself to start work can be really useful. But I also find that as the timer gives me a reason to get going, the buzzer goes off as I hit my stride.

My technique is to use Toggl (more on how I use Toggl here). You start a timer, define the task, then get going. Keep yourself beholden to the task at hand, and to the timer’s tick. You’ll soon realise how little time you spend actually focused on a task and how long it takes. No time feels more wasted than time deleted from a Toggl tab.

 

Your Turn

What are your tips for getting started? What’s your sticking point?

Here are some responses I got from last week’s blog (See? You’re not alone!):

What are your tips for getting started?

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