For freelancers the key to financial management is organization, as losing track of bookkeeping information can have dire results both in the short and the long term. Short term, a failure to invoice or chase payment can result in an unsatisfactory cash flow situation. Long term, mismanagement can lead to trouble when tax return time rolls around.

So what can freelancers do to make their financial affairs run smoothly? Following a few tips and making some sensible choices can help ensure that earnings are received, noted and declared in a pain free fashion.

Money Management Tips for Freelancers

While every worker and every business will have slightly different financial demands, there are some things that can be universally helpful to those who work as a freelancer in their field. Things to consider when managing your money as a freelancer include:

• Keep business and personal finances separate. Open a new account for business transactions and use it for incomings and outgoings related to your work. While this is not compulsory for freelancers, it can help reduce the possibility for confusion between business and personal funds when the time comes to total up the taxes.
• Keep a financial diary. Good business people will have a diary of appointments or jobs where they will be in attendance. Creating a separate diary for finances can help to keep things on track. Note the dates of invoices in here and the dates that payments become due, as this will allow you to chase payment if necessary. Also, note the dates on which payments are received, be it in cash, check or by bank transfer. This will allow you to ensure that business and bank records match up and tally.
• Ensure that you keep and file all business related receipts, so that expenses can be properly calculated at the end of the year.

Getting Help with Your Freelance Money Management

While many people are skilled in the field in which they choose to work, few freelancers are experts in accounting. Nobody needs financial mix-ups adding to the pressure of their work, so seeking help with money matters from a professional can be a great idea. Options open to freelance workers include:

• Employing an accountant. Using an accountant to keep your books and complete tax returns at the end of the year is a great way to take the pressure off. An accountant will also be able to give up to date advice on money management that is relevant to the way in which you work.
• Using a Freelancer Payroll Solution is also an option, allowing those who prefer to work for themselves to enjoy the security of a PAYE position without the hassles of handling their own finances.

I’m very flattered for the email, but would like to recommend anyone with debt problems to seek professional advice. I’d like to offer you this response, however, which is my personal view.

I would never lie to my partner about debt, as sooner or later he would find out anyway. We share the post, share the bills and share the cost – so lying wouldn’t solve anything. However, it is more of an issue when we lie to our families about how we feel about the debt. Many of us cover the situation up by claiming the debt is manageable or you have it ”all worked out”. In reality, we’re hurting deep down and anxious to find a way of gaining money we haven’t got. Covering such problems up really doesn’t help, as those who care for you cannot help you if they aren’t aware of your troubles. There is a potential for strained family relationships when your debts force you to borrow money from those around you, even though you’re not sure when or if you can pay them back on time. Therefore, debt can harm family relationships if the problem is covered up or hidden.

I hope my perspective has been helpful, and if you do have debt problems, I can’t stress enough, seeking debt advice and communnicating about your debt is the best way forward. I’ve found these debt FAQs really helpful for answering some of my common questions about debt solutions.

Before deciding to take control of our debts, they did worry me to the point that it was affecting my sleep patterns and I did suffer from a lot of stress. I did lie to my husband, mainly by not telling him how bad things were financially, and just letting him think that everything was under control and there were no problems whatsoever. Things really came to a head when I had to go into hospital and had to trust him to handle the finances for a week. There was no option then but to tell the truth and hope for the best.

It was the best thing I had done in ages! Yes he wasn’t pleased, yes he did have a good whinge. But at the end of it all, he was supportive and we have sat down since and worked out how we can afford everything we need and get some extra money together to save up to pay off the smaller debts. We only have 3 debts but they amount to £30,000 but we only have an annual wage of £27000 coming in, and we are a family of 5.

We sat down together and looked at money coming in and money going out. We have seen areas where we could cut back our spending, like on the little luxuries of brand names at the supermarkets. I now shop around instead of getting everything in the one shop. We have changed our suppliers for utility bills, we have letters in to reclaim charges, and I am now not afraid to complain to a company about anything I find unacceptable.

I have to say that the stress of keeping it all in has lifted and I feel so much better for being honest with my husband. We are now working as a team to try and clear our debts as quickly and painlessly as possible. They say that a trouble shared is a trouble halved, and it is true. I don’t have to bear the burden alone and I know there is someone there that I can talk to and be honest with, instead of plastering a false smile on my face every day and lying to everyone about things. I feel better now, and hope that by reading this someone else will have the courage to face their debts head on and will feel like I do now.

If you would like to write a guest post for Money Stand, please get in touch.

Many people are struggling to keep their heads above water in the current economic downturn. Some have even had to take cut in pay, while their financial commitments have gone up and up.

One solution to the problem is to try and increase your income with extra work. If you already work full-time, you may be able to find a part-time evening job, say, working behind the bar in a pub, stocking supermarket shelves, or, perhaps, office cleaning; these are all jobs that can be carried out in the evenings, and will supplement the money already coming into the household.

Selling unwanted items via an online auction site, is one way of increasing your income. First of all, look around your own home to see if there are any unwanted items. Most families have things stored in attics and spare rooms that will probably never be used again. Start listing them, then research the auction sites to find out what is selling, and the prices they sell for. Of course, no-one has an inexhaustible supply of goods, so you could try asking around other family members, to see if they have items they no longer need.

For those people who are skilled at crafts such as knitting, crochet, sewing, card-making and so on, there are sites available nowadays that enable you to open your own online shop, to sell the items you make like Etsy. There is usually a small fee for selling, but you will not have to find premises or staff, so the earnings could be quite considerable. Similarly, if you are good at writing verse and poems, or drawing and painting, you may be able to offer your work to greetings-card companies. You will generally have to write to ask the company for their guidelines first, then submit a sample of your work.

All these are ways to potentially increase your income. By trying one that suits you, you may be surprised at how much extra money you could earn.

Kublax Expenditure Graphs

I’ve been looking for a way to monitor my expenses online to help me see the ‘bigger picture’ of my finances for a while now. Despite budgeting and generally being quite frugal, I started looking for a program that could take some of the work out of budgeting for me so I can spend more time actually figuring out where I should be cutting back. That’s when I found Kublax.

I’ve tested the site and have to say, I’ve enjoyed using it. I found it more user friendly than Wesabe (I got frustrated just trying to upload my account!) and particularly like their ‘people like you’ functionality that gives you an idea of what other people spend on the same expenses.

Kublax is a free to use online money management platform that basically aggregates all your bank accounts in one place. Using bank level security, Kublax pulls together bank, credit cards and building society accounts and then divides all your purchases into an expense category. It’s a lot easier than other desktop accounting tools I’ve tried, and really easy to read, as you can view your finances in bar graphs and pie charts.

I started off by adding my accounts and setting my budgets and alerts to let me know if I start spending more than I would like to in a certain area. Once I’d gone into the transaction section and categorized my expenses, the magic started happening. I could then see my budget against my spending and revelations where made. I spend a lot more on shoes than I thought I did.

Kublax Money Management Tools

By using the ‘compare me’ function, I also discovered that I spend a lot more on shoes than the average other Kublax users. Another revelation.

The other feature of Kublax I think is great is the alerts function. At first I thought it would probably be an annoying function, telling me that I’ve overspent on shoes each day, and lets be honest, I already have my partner to tell me that. However, what this function could really be good for is alerting you to any unusual account activity.

If you’ve ever got that dreaded call from the bank, asking you if you’ve just spent a ridiculous amount on car rental in the Maldives on your credit card while you sit in dreary ole England, you’ll know that sick feeling in the pit your stomach. The alert function means that Kublax will tell you of any irregularity, most likely before your bank has called you.

Overall, I like it. I like that it makes me more aware of my spending habits, and that it makes me actually want to log in once a week to see how I’m going financially. Now, I just have to make myself cut back on shoes.

Most of us shop around to get the best deals when looking for financial products, we also know what we’re looking for to meet our specific needs i.e. tracker interest rates or fixed rate loans but there are thousands upon thousands of adults who are uneducated when it comes to personal monetary issues.

Lack of education in the financial area can and will lead to large losses of money from the purchasing of unstable and unsuitable financial products. In turn this can lead to even more dramatic effects; those who have got into debt will have to find a financial package to help them recover from that position whether it’s an IVA, bankruptcy or a consolidated loan, choosing the right one that will provide the best solution is a hard task if you don’t have the understanding of what each option offers. You need to know the pros and cons of what they are offering. People need to develop an understanding of economics and finance so they can make the right choices before they get taken advantage of by a loan shark.

Financial education should incorporate lots of different areas to help people manage their money more effectively. The key points being:

• Planning ahead with savings, pensions other investments for the unexpected
• Keeping organised with financial documents and making assessment of advice received
• Knowing whether the credit limit, loan, mortgage is right for them
• Looking for suitable financial options and opportunities
• Engaging confidently in financial situations

Getting children educated about money from a young age either at school, college or at home has massive benefits and sets them up for a happier future with less stress and strain over their finances.

Financial education will enhance and develop people’s understanding of economics and finance and give them a much needed foundation to manage their money better and make knowledgeable choices with financial packages.