There are almost 57 million freelance workers in the U.S., and with the growing popularity of remote working, that number will undoubtedly rise over the next few years.
Freelancers can do anything from marketing and writing to graphic design and IT solutions. There are many benefits to actually being a freelancer, including setting your own hours, having flexibility, and being your own boss.
But, there are some risks to working in the gig economy as a freelancer, too. Being your own boss means a lot of things. First, your success depends on customer satisfaction. If your clients aren’t happy, they’ll be less likely to ask you to return and they won’t refer you to your friends – the bread and butter of your business.
Second, you have to take care of everything from your own health insurance and retirement funds to keeping track of your expenses. So, if you’re a freelancer, how can you make that easier? How can you keep track of your expenses without it becoming a headache? Let’s look at a few tips.
Learn What Your Business Expenses Are
When you decide to be a freelancer, it’s likely because you’re good at a particular job, whether it’s writing, design, etc. But, you may not know the ins and outs of how to manage yourself like a business.
It’s important to understand what your business expenses are, so you can write things off and get a break on your taxes.
Don’t be afraid to do your research. Traveling to meet with a client can be added as a business expense. Any equipment you have to buy for your job also can. But, if you’re buying a gaming system on the same purchase as a new laptop for work, you’ll have to separate the two.
Keep Track of Everything
Tracking is a huge component of keeping your expenses in order. It’s important to have a good receipt system in place, using a program that can not only scan your receipts but keeps them all in one place for you to easily access when tax season rolls around. If your current program isn’t doing it for you, you might want to replace Neat software with something more streamlined and efficient.
To make it easier on yourself, try categorizing your expenses. Your categories could include things like:
- Travel
- Meals
- Utilities
- Misc.
Another way to stay organized with your expenses is to have a separate credit card just for work. This is a common practice when you travel for a business or a big company. You use a “company credit card”. Since you should view yourself as a business, having a separate credit card for all of your business ventures will make it easier to separate work expenses from personal ones.
Ask for Help
If you’re just not good with expenses or the financial side of your freelance business, don’t be afraid to hire a professional to work with you. Financial consultants and tax preparers can help you to keep all of your expenses organized, making sure that you get the write-offs you deserve when your taxes are due.
