I’ve been a freelance writer for the past four years, making money almost exclusively online. The corporate world is definitely not for my personality, so I did everything I could to avoid it. Along the way, I’ve learned several useful money lessons that I wouldn’t have learned otherwise.
Bill early, pay late. This took me a while to learn, and it’s more important especially if you have very busy clients who remember to pay you only a week after you send your invoice. Now, I bill them on the 1st of the month, while I pay for business expenses (contractors, web hosting, subscriptions, etc.) mid-month. By practicing this, you’re making sure that you already have enough funds when it’s time to pay for business expenses.
Diversify skills and sources of income. I didn’t just depend on my writing, especially when I was starting out. I also did a lot of design work, search engine optimization, edited videos, some data entry jobs, sold some of my artwork, and joined ad networks such as Google Adsense. Having various sources of income ensures that you always had an alternative venture in case your main gig ran a bit dry.
Also, as a freelancer, the diverse skill set allowed me to upsell services to clients (“Do you want some new graphics to go with the articles I’m writing for you?”), and I would become their go-to person for most of their web needs.
Be frugal with your time, not just money. One of the big problems I had with my first years of freelancing was that I let it consume so much of my time. I would work longer and harder than 9 to 5 ‘ers, thinking that this was the only way for me to make enough money. Eventually, I became a productivity blogger over at Pimp Your Work, and had to learn some time management skills. Now, I have made myself efficient enough to only work 9 to 15 hours a week, and can now enjoy the freedom that freelancing promises.
Have a padded emergency fund. I probably sound like a broken record since I talk about emergency funds over and over. But it was a real lifesaver during those months when I would earn only P12,000 and had to feed and pay for a household of 3 people, and my tuition too.
Don’t undersell yourself. I used to charge $5.00 for a 500 word article. That’s okay as a starting point just to build up your folio, but I stayed around that price range for one or two years, even after I was getting so many happy testimonials from clients who kept referring me to others (meaning: my work was worth more than $5). Hindi ka talaga mabubuhay kung $5.00 per hour ang singil mo. Especially since I had dependents. It took me a while to realize that people aren’t just paying for the words I write, they’re paying for an hour of my life and the unique insight I bring to the table. Does that really just cost $5?
Competing with others on the basis of price alone isn’t a sound business model. Someone will always be cheaper than you! So I competed on quality and experience, and can now turn down work that I don’t find interesting.
Every job title, every industry presents its own unique money lessons. What are the money lessons you’ve learned as a result of your work? Please share them with other Frugal Pinoy readers