Tips To Manage Your Finances As A Freelancer

According to the Department of Statistics Malaysia, freelancers make up 26% of the Malaysian labour force in 2020. Although the Covid-19 pandemic has badly affected our economy, the freelancing industry is one of the few industries in Malaysia that has continued to show considerable growth. Many Malaysians have started freelancing or taken up gig economy jobs to continue earning a living in these uncertain times.
Whether you are a freelancer or thinking of starting as one, here are some tips to help you manage your finances when you don’t have a fixed income.
Plan your jobs and assignments
Generally, one of the biggest advantages of working as a freelancer is that it allows you to be flexible with your time. Meaning, you’re able to work whenever you want. However, this also means that freelancing requires you to be very disciplined, in order to meet the deadlines of your assignments.
Therefore, freelancers need good time management skills. Here are some tips to manage your time better.
  1. Schedule your projects. While working freelance, a project schedule is a very helpful tool to have. It can help both you and your clients understand the timeline of the project, and the progress that has been made. A project schedule also allows you to get a more comprehensive picture of your workload at a certain time, so you can plan your work accordingly.
  1. Meet your deadlines. In order to work effectively as a freelancer, you need to arrange all your jobs according to their deadlines and then prioritise the jobs that have closer deadlines. There are multiple applications that can help you with this, such as Asana, Slack or Trello.
  1. Plan your work. A very common pitfall for newbie freelancers is accepting every job you see, and then realising you don’t have the time to complete all of them. Before you agree to take on a job, consider the projects that are already on your plate. Be careful not to overcommit and risk letting your client down when you can't deliver on time.
One thing to remember is that as a freelancer, your main responsibility is to deliver what you promise the client on time. In order to be a successful freelancer who gets recommended by your clients, you should always deliver a satisfactory job by the deadline.
It’s true that working freelance usually means handling more than one job at a time, which makes planning a very important aspect for a successful freelancer.
Build your network
For a freelancer, one of the biggest challenges that you will have to face is securing jobs. Freelancers are paid by the job, so not having jobs equals to not having any pay.
It is important for freelancers to keep improving their skills and to continue to market themselves to ensure that they have a steady stream of jobs and income.
Here are some useful tips for freelancers to better promote themselves to clients:
  1. Have good self-marketing skills. As a freelancer, you need to constantly ‘sell’ your skills to clients to convince them that you are the right person for the job.
  1. Update your portfolio. No matter how good you are, if your portfolio is outdated, your client won’t know about all the skills and experience that you have NOW. Don’t be afraid to ask your clients for testimonials and reviews to keep your portfolio up-to-date and help you win future jobs.
Pro tip: You can also create your own website or a LinkedIn profile with all your necessary details presented in a professional manner. This will help prospective clients find and reach you.
  1. Establish your profile in multiple platforms. You can also create profiles for yourself on more than one platform. This will increase your online presence and widen your network of prospective clients.
Pro tip: Whether you’re a programmer, writer, graphic designer, or a writer, these online platforms can help you get started in networking and marketing your skills.
eRezeki:  A government platform for providers specialising in software engineering, web development and more.
Rtist Malaysia: A platform designed for creative professionals, it also notifies members about upcoming workshops that come with discounts or even free entry for members.
Gigworks: This platform provides a protection policy for both the service providers and their clients, to ensure that both the client and the freelancer follow their agreement and payment details.
If you’re looking to increase your income using the internet, here are three popular options online:
  1. Create digital content (e-books, online courses, smartphone apps)
  2. Selling products as a third party (drop shipping, affiliate marketing)
  3. Market your talent/skills (voice acting, online tutor, social media marketing)
Looking for clients is an ongoing process while freelancing but if you keep improving yourself, the process will become easier. It is also very important for you to keep cordial relationships with your clients so that they will think of you if they have any future jobs.
Keep track of your money
Another important aspect of working freelance is your ability to manage your finances. Freelancers may not have a steady income stream, so it is important to manage your money carefully.
Keep your finances in order as a freelancer with these steps.
  1. Keep emergency funds. Emergency funds are important for everyone but it’s even more important for freelancers. Other than being used in case of emergencies, these funds can also hold you over during periods where you’re not getting many jobs. Just remember to replenish your emergency funds once the jobs start coming in again.
  1. Watch your expenses. Know what your important monthly expenses are going to be, like rent, utility bills, and your education or car loans. Create a monthly budget to identify your monthly commitments. This will also give you a general idea of how many projects and jobs you need to do monthly to ensure you can meet your financial obligations.
  1. Get life and medical insurance. One of the most worrying aspects of working freelance is that you will not have insurance coverage provided by your employer. In order to help freelancers with this, SOCSO introduced the Self Employment Social Security Scheme in case anything happens while you are working.
As a freelancer, you can still get affordable life and medical insurance that is tailored to your needs to ensure your financial well-being.
  1. Contribute to your retirement fund through EPF’s i-Saraan. EPF (Employees’ Provident Fund) has introduced a voluntary contribution scheme called i-Saraan to help freelancers grow their retirement fund. You also get to enjoy special incentives from the government up to 15% per year on the contributions you make.
While freelancing may not be a permanent option for you, being financially prepared will help you survive and even succeed as a freelancer. #SediaPayungKewangan

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