avoid freelance financial headaches in 3 easy steps...

Hey {NAME},  My wife and I have been reviewing our personal finances recently. And since we are both long-term students of Ramit Sethi, we are using his [Conscious Spending Plan]( as the foundation for our decisions.  (Fun fact: we actually met at the first-ever networking event Ramit hosted back in 2012.)  At the same time, I know it can be hard to plan your finances around unpredictable freelance income.  That's why I want to share 3 simple steps that I follow to avoid financial headaches as a freelancer with you today.  Let's get started…  1. Offset the increased risk of losing clients with a larger emergency fund.  It's possible for a traditional employee to go through their entire career without ever being fired.  But you are going to lose clients as a freelancer. It's inevitable.  That also means it's predictable, though.  And it's an easy problem you can plan for ahead of time — rather than getting caught off guard when it eventually happens.  That's why I believe freelancers should offset the increased risk of losing clients by having more cash savings than traditional employees.  I personally keep a full year of personal expenses in cash as my emergency fund.  That way, I never have to worry after I lose a client. I have plenty of cash to tide me over. And I can take my time to find my next opportunity — instead of letting financial stress force me to take on a nightmare client because I'm desperate for money to pay my bills.  Which brings me to my second point…  2. Create streams of monthly recurring freelance revenue.  I also do not want to stress about having to find new clients every month just to pay my bills.  That's why I make sure that I have enough deals in place that pay me the monthly recurring revenue I need to cover all my personal expenses (and then some).  Since it means I can sleep easy at night knowing that my bills are paid. Even if I hit a slow period and don't get any new projects for a long time.  Just be careful you don't over-commit to these monthly recurring projects.  Because if you have to spend 100% of your time delivering work for your monthly recurring clients, your income will hit a ceiling. Since you won't have any time left over to bring in new business. And your income will get stuck at whatever the total of your monthly recurring projects is.  That's why I recommend you spend no more than half of your bandwidth on retainer clients. And if necessary, you should focus on increasing your value and your rates so that you can bring in the income you need from that time alone.  Because you want to have at least half of your time available to invest in projects that have even more upside. (Like ones that pay you royalties or performance bonuses.)  And that's a perfect segue to my 3rd point…  3. Plan your personal spending based on your recurring revenue only.  It can be easy to let your personal spending creep up when you have a steady stream of one-off projects, bonuses, and royalties rolling in.  And I'm not saying you can't reward yourself for having success. (Since that would make me a hypocrite, after [I bought a really nice watch]( to celebrate when I reached a million dollars in lifetime freelance income. If you can't see the post, you may need to [add me on Facebook](.)  But you do need to be careful.  First, because once you get used to spending more money on yourself, it can be really hard to cut back again. Which will put you in a tough spot if that stream of one-off projects dries up.  Yet that's not even the worst part.  The worst part is the fact you will squander your chance to do something even more meaningful with that extra money in the future.  Because if you can live on your monthly recurring revenue alone, it means you can get aggressive about using any extra income you make from one-off projects, bonuses, and royalties to reach your long-term goals.  Maybe that's buying a house.  Maybe it's building your emergency fund like I mentioned above.  Or maybe it's a luxury watch like the one I wanted.  You can spend the money however you want.  But my rule of thumb is to make sure I save at least one third … invest at least another third for retirement … and then I can spend the last third however I want.  You're welcome to adjust that based on your own goals, though.  But no matter what, you will get there a lot faster — and be able to give yourself a much more stable financial future — when you can plow all of your one-off income towards your long-term goals. Instead of having to tap into it just to pay for groceries or your Netflix account.  And when you add that to a full emergency fund and a steady stream of recurring revenue like I mentioned before, you may never have to worry about money as a freelancer again.  Until next week,  -Brian [Unsubscribe]( | [Edit your details]( Freelance Like A Pro PO Box 281 Bloomingdale New Jersey 07403 United States [Powered By Kartra] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -