No fixed pay. Short term contracts. No annual leaves.
How to do financial planning (Singapore) like that? (Check out the 5 myths of financial planning.) No money to do stock investment too. Unfortunately, the current job market dynamics is one that prefer short term contracts. Many University Graduates are having difficulties in finding a permanent job and some are choosing freelance as they want to have time freedom.
Whatever the reason to be in freelance, it is sure to come with many disadvantages.
Concerns of a Freelancer
During my annual review with my freelancer clients, most of them shown financial concerns. While they want to follow their dreams, they are also tempted to have a regular paying job. (Learn how to manage your finances: Financial Excel Cheat Sheet). The biggest problem for freelancers is that they are not protected under employment protection and social safety net framework.
Preparing to be a Freelancer
To stay true to your dreams, be it a uber driver, a photographer or internet marketer, there are preparation that you need to take so that you can stay ON YOUR TRACK. You won’t want to quit your dreams after 3 months right? Besides, your loved ones might nag you to go find a regular paying job if you are NOT financially stable. Hence, here are 3 steps to help you stay on your goals.
Step 1: Step aside an emergency fund
(Remember to have an emergency hammer)
Delayed payment? Sour rental agreement? Unable to find clients?
How long can you last without cashflow coming in? It will definitely dig into your savings. Save the nagging and save yourself from money woes! Dig into your emergency funds and sustain yourself during this critical period.
Set aside 6 months to 12 months worth of money (your expenses)
If there is no income coming in, these emergency funds will continue to fund your food, your transport and also your lifestyle. Fight on!
Step 2: Preparing for emergency… outsource your risk
Wah. I already have an emergency fund. What other emergencies do I need to prepare for? Well. There are certain things in life that might wipe off your emergency funds IN AN INSTANT! Imagine a person at work and suffers a heart attack. Do you feel that he might need a surgery? How expensive do you think this surgery is? How long will he not be working? During these period, do you think he will be getting paid?
Planning for medical expenses, critical illness, etc may come knocking in our lives. This is when you can outsource the risk to an Insurance Company. In exchange for a small sum of money, you can be protected for a large risk that might come in your way. It will be good to do financial planning (singapore).
Step 3: Understand your cashflow
Money in. Money out. Money disappear. How many people you know struggle with money, can’t save, don’t earn enough, don’t know where their money goes to at the end of the month, or can’t figure out what to do next with their careers? We live in a time bogged down by massive student loans, colossal HDB debts and meager starting pay. Before beginning on their financial journey, we have already been given a great disadvantage.
Therefore, we first need to learn how to manage our finances: Financial Excel Cheat Sheet.
Conclusion: A little planning goes a long way
There is a saying that goes, Bao Shua Bao Hai (you need to take care of the mountain and the seas). It means that you need to take care of everything yourself. To aid you, we have put up a Financial Wizardry Program (<—click here) to help you with it. Hope that your potential will be fulfilled, no longer starving and have a purpose in what you do.
In Journey with money, we want to empower individuals to retire early and avoid financial pitfalls such as this. Such a financial pitfall will delay retirement by at least a decade if not forever. If you already have done financial planning (singapore) or have a financial planner (singapore), that’s fantastic. You should be proud that you have taken the first step. However, there are many still unaware of this. We will like to offer our readers (even if you have a plan already or not) a free program Financial Wizardry Program (<—click here) to push your finances to the next level.
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