Whether you’ve taken the leap into the freelance lifestyle or you’re simply toying with the idea, you probably have a lot on your mind in regard to your family’s finances.
Due to the uncertain nature of the economy, walking away from a steady nine-to-five gig can be an incredibly daunting. However, it is possible to live the freelance lifestyle while still making enough money to support your family.
Perhaps the most important first step to making it happen is by thinking about the long-term rather than “now.” For example, what will your bank account look like five years from now? Ten? Will you have everything in place to put your kids through college and ultimately retire comfortably?
If the answers to such questions are little more than a question mark, it’s time to start getting serious about your financial future. The following tips can help steer you in the right direction regarding how you can ensure a healthy and wealthy household without being bound to a traditional job.
Keep a Close Eye on Expenses
Although it might go without saying, you need to keep a close eye on what you’re spending on behalf of yourself and your business.
Chances are, you’re going to need some sort of solution to help you along the way if you have trouble keeping track of your checkbook. Compare expense management vendors accordingly to help yourself understand how to balance your personal and professional budgets to avoid any spending snafus.
After all, if you aren’t budgeting you’re simply guessing.
Beef Up Your Healthcare Coverage
Healthcare is most certainly a hot-button topic right now, especially given the exceedingly high cost of coverage for most families. That being said, health insurance is must for those looking to avoid insane hospital bills and woeful “what-if” scenarios. Nobody wants to experience the horrors of being put in debt due to lack of coverage, for example.
Family plans can be incredibly expensive for freelancers who already have their slew of taxes and expenses. Ideally, you can hop on the health insurance of your spouse for optimal coverage that won’t cost you an arm and a leg. If this isn’t possible for you, don’t panic: instead, seek out healthcare subsidies and credits you may qualify for to ease your financial burden.
Save, Save and Save Some More
It never hurts to have more money in the bank than you realistically need on hand at any given moment. Consider, for example, the necessity to regularly put money away for the following:
- Prepaid college plans for your children, many of which are crucial for parents on a tight budget
- Emergency funds for medical expenses and catastrophes
- Retirement, which is important for freelancers who aren’t paying into pension plans
Remember: freelancers must play the long game and therefore constantly be considering the future when it comes to their spending and saving habits.
Life Insurance is a Must
Again, nobody wants to think about negative “what-if” scenarios. That being said, life insurance represents one of the most responsible investments you could possibly make as a parent. Given that life insurance policies are relatively inexpensive versus their massive payouts, paying for such insurance can provide both you and your spouse peace of mind if something does go wrong.
Communicate With Your Spouse
Communication is key to understanding your financial goals and the realities of how you’re going to reach them. You need to be on the same page with your spouse regardless of who’s the breadwinner of the family. While such conversations may indeed be awkward or uncomfortable, being open about finances (or lack thereof) will only benefit you in the long-run.
Be Prepared for “Plan B”
The day may come when you realize that the freelance lifestyle may not be realistic for your particular situation. You should have some sort of backup plan in place in case your solo career doesn’t pan out, whether that means returning to your old gig or finding something new. Don’t think of such a choice as admitting defeat, but rather doing what’s best for the sake of your family.
Being a freelancer and a parent can represent some truly difficult financial decisions. Do your best to prepare for the future and understand exactly what you need to do to provide long-term protection for your family.