5 Ways Freelancers Waste Their Money

If you haven’t already noticed, we’re currently emerging from a global pandemic. We’ve been through social isolation, lockdown and quarantine, and Britain is facing a tough period of unemployment and economic uncertainty. So many of us have lost our jobs, our clients and our income over the past few months and we’re just about ready to start getting back on our feet again.

As a freelancer, money is always a big topic of conversation. From handling our own income tax to budgeting for quieter periods, it can often feel like a struggle to stay afloat. Particularly in times like this, where every penny counts, we can’t afford to be wasting our cash on non-essentials — even if we’re told they might just save our business.

I’m by no means a financial expert, and I’m definitely guilty of the odd indulgent purchase in my business expenses. However, over time I’ve learnt the hard way that there are five key expenses that we definitely don’t need to burn our budgets on.

Shiny New Equipment

When I first started out as a freelancer, I had a preconception that I needed to have all of the latest tech to be successful. I was looking into buying a new iPhone with a better camera, I wanted to get the latest iMac, I wanted a new camera, pricey headphones…I believed that by spending all of this money on expensive equipment, that I would somehow become an incredible freelancer overnight.

It’s just not true. In some industries, yes having high-quality technology does impact the quality of your work, but for most of us, our standard laptops, phones and headphones are perfectly acceptable to keep us going. For most clients, it’s the time, effort and end result that impresses them the most, rather than the tools you use to work on — and as long as you can do your work efficiently on your usual device, then it doesn’t matter if it’s the latest model or not.

Expensive Networking Groups

There’s no point in denying that finding clients is one of the hardest parts of working for yourself. Trying to source reliable projects with solid clients that are exciting to work on can sometimes feel like the biggest job you complete in a week. But signing up for pricey networking events every month, or joining a high paying networking group is not always the best way to client-hunt.

Whilst I do admit that networking groups have their advantages, and it’s always nice to meet other freelancers, if you don’t have the budget for their subscription fees then try sticking to the low-cost client sourcing options instead. Social media marketing, email marketing and creating a great accessible website are quick and cheap ways to get started and allow you to connect with more businesses than just those in your networking group.

Coffee Shop Hot Desking

An aesthetic fantasy for many a wannabe freelancer is the coffee shop workday. Spending long luxurious hours sitting by the window of your favourite coffee shop, sipping a fresh latte and casually replying to a couple of emails before your pastry arrives. Unfortunately, all of those delicious croissants, cappuccinos and coffee shop visits can be incredibly costly for your business budget.

If you have the funds early on, try and invest in a good quality coffee machine for your house and carve out a space that feels relaxed, comfortable and productive for you to work in at home. Choose a desk that you’ll want to work at, a chair that’s great for your posture, and a couple of indoor plants to add some greenery to your workspace. By making these small investments at the start of your freelance career, they really can help you to find a budget-friendly working routine in the long run.

Accountants

I know so many freelancers that rely on accountants, and I’ve often considered hiring one for myself as well — however, most months I just don’t have the budget to afford one, when I have other things to pay for. So I’ve had to find ways to organise my own finances instead. Unless you have serious overheads or have a seriously complicated stream of income, it is definitely possible to manage your money alone without shelling out for an expensive accountant to do it for you. Here are just a couple of tips that I can recommend:

• Keep all of your receipts, and go through them at least once a month — making a note of any business expenses such as travel, coffee meetings, software or equipment
• Make copies of every invoice you send and save them somewhere secure
• Create a spreadsheet of all invoices and payments from clients per month for each financial year
• Create a spreadsheet of all expenses per month
• Set aside a portion of your income per month to contribute towards your income tax payments
• Don’t be afraid to call HMRC or any other relevant money service for help or information — it’s what they’re there for, so don’t be embarrassed if you feel confused or lost.

Costly Software & Online Programmes

For every industry, there are huge collections of programmes, software and downloadable packages designed to help you do your job better. From subscriptions to stock photo sites, to Adobe design kits and editing rooms, it can feel like all you do is spend money to make money from month to month. Whilst some programmes are unfortunately unavoidable costs, others can be swapped out for free or cheaper alternatives after just a little bit of research.

For free stock photos, for example, try out Unsplash — a collection of beautiful and high-resolution images, with free, unlimited downloads.

For simple graphic designs and branding, try Canva — a free online tool for designing everything from business cards to book covers to resumes.

For monitoring your time spent on each project, try Toggl — a timing device with categories and tags for each client and task you work on. (Great for working out those complicated end of the month invoices!)

There are always ways we can cut back and reduce our spending when it comes to working self-employed, even if it means sacrificing a little bit of time, extravagance or even our favourite vanilla lattes.