For the past 2 years, I have been sorting out my finances and reviewing the money in, money out approach as I, being a freelancer and project based – finances doesn’t come in regularly like how employees get to. Typically during December, I check on my bank accounts and credit card transaction and come up with a strategy on how I would be able to zero out the debts and prepare for the first quarter of the New Year.
Here are few realizations I learned and endured this year, 2013:
1. Some clients delay their payments, as much as Focusing on one project is good to get yourself away from spreading yourself too thin; it’s still safer to have another account to save you from getting indebted.
2. Once you’ve purchased one big thing through your credit card, delay the rest of what you think is another need not until it’s fully paid.
3. Dreaming and Goal-setting is great but manage your finances. If you’re still paying for a car, stick to it until you’ve already saved up for the entire car payment throughout the year before you save for another big purchase.
4. Eye on the Goal. Have a separate bank account and treat it like a utility bill. Monthly, deposit a percentage from your commissions or retainer fees.
5. Live within your means.
Fixed expenses are the largest money drain, pay yourself first, establish financial goals and then splurge once you’ve segregated your cash to specific financial departments.
6. Remit for your Social Security and Phil health.
You may not be in favour of the Government but you’ll thank them somehow for requiring you to remit few amount to cover for your pension and health care. It may not be big, but it sure is something.
7. Invest on as much Financial Avenues as possible.
But before that, study and don’t jump into risks you’re not aware of. There are Equities managed by banks, Insurances that covers your life and death benefits and mutual funds. One avenue is never nor won’t be enough; diversify.
8. Medical Card / Health Care
In times of emergencies, a health card will come in handy. Yes, it may be costly in terms of premiums but the convenience of having one would make you worry free. I don’t think you’d want to be covered in blood and pain yet still worrying on how you’ll pay for your check-up, Emergency visit and your hospital bill, right?
As of date, I’m collecting what is due and will have all debts settled. It’s tough to live with an anxious heart knowing you’ve got so much interest and payables hanging. Financial freedom starts from within.