Porn star Cherie Deville recently wrote an article for the Daily Beast discussing her absolute horror at how many friends she had in the adult industry whose life had been ruined because they simply didn’t know how to manage their money. Don’t be that person!
Working freelance has its benefits, but it also has its challenges – namely consistency of income. It can be tempting to buy luxury goods when you’re liquid instead of saving, investing or even buying property vs. renting. Learning how to manage your money can help weather the storm during down times. This is especially relevant now as America faces an economy that’s given us the highest inflation rates since 1982 and soaring gas prices. To be clear, no one is saying you shouldn’t enjoy the money you’ve earned and buy yourself that Chanel bag you’ve been craving, just that balance is key.
Be prudent not stingy; spend your money but make sure you have it to spend.
The following are a few ideas to kick around in your head that can help you achieve balance.
1) Determine what percentage of tax you paid last year. Every time you earn untaxed income this year make sure to take out that same exact percentage before you spend a dime. Squirrel it away- preferably in a savings account where you can earn interest. This way you’ll have no surprise tax bill come 2023 and in fact, you may have a windfall if you qualify for a lesser rate – getting to keep all the money you’ve stashed.
2) Hire a real tax person – don’t do your taxes yourself unless you’re an accountant. It’s tempting to save their fee and pocket it, but even with programs like TurboTax that claim to help you file correctly, there’s no substitute for an expert – you’ll benefit more than the cost to hire them as they’ll have creative and legal ways to help you get your bill down that you never imagined. Check around with friends to find a great accountant.
3) Balance your checkbook and credit cards. By looking at what you spend every month you’re held accountable and can see what is coming in and out of your bank account. This allows you to make wiser decisions in your spending habits.
4) Make yourself a budget and be thorough. Follow it. You can even log the items into your checking account before the bill is due to make sure you have the money set aside to pay it. Once again, no surprises! You’ll really know at the end of the month if you have that extra money left over to buy those Jimmy Choos.
5) Put everything you buy that you can on one credit card that offers benefits. Have a running ledger of what you owe, putting that money aside (so you don’t spend it) and pay it off religiously every month. You will not only raise your credit score by using the card every month and fully paying it off, but you’ll earn rewards. Two cards which offer great benefits are Bank of America Signature Visa which has an annual fee of $95 but covers $100 worth of Airline incidental expenses, pays up to $100 towards TSA precheck or global entry fees every four years and offers cash back on purchases, and American Express Blue Cash Everyday Card which has no fee and offers cash back on purchases.
6) If you’re making enough to save, look at a company like T. Rowe Price and open a pension plan for your future. Understand that if you open a pension, you can’t withdraw that money till retirement age without fees. However, you’ll earn interest that will maximize your initial investment and perhaps give you financial freedom in your older years.
Hopefully some of these ideas will help you to use your money more wisely – and remember to always get advice from a pro. YNOT Cam are not bankers or investment professionals. Here’s to your healthy financial future!
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Alyssa Collins hails from Minnesota, where snowy days were the perfect excuse to stay warm inside and write. Over the years, she turned that joy into a career and has authored numerous articles for various publications (under pen names). Email Alyssa via alyssa@ynot.com.
Header image via Pexels.com.
