For reasons ranging from flexibility of schedule, cost effectiveness, inability to take on the rigors that come with a regular job, unemployment and a whole host of other reasons, a lot of people are now joining the ranks of the freelancing population.
And if you’re somebody seriously contemplating the possibilities of taking the freelancing plunge head on, blog posts enumerating reasons why you should start freelancing, things to keep in mind when starting a freelancing career and so on and so forth, are never in short supply.
Freelancing can be a rewarding experience, but if you’re a freelancer yourself, you already know by now that freelancing is not a walk in the park.
Freelancing and financial literacy
That said, let’s tackle one aspect a lot of freelancers oftentimes neglect to address – financial literacy.
Investopedia.com defines financial literacy as the possession of knowledge and understanding of financial matters. Lack of financial literacy can lead to poor financial decisions that can be detrimental to the overall financial health of an individual.
Of course, financial literacy isn’t exclusive to freelancers. In a perfect world, financial literacy is something EVERYONE should possess. The problem is, financial literacy is not a subject explicitly taught in school. That being said, why are we singling out freelancers in this blog post?
Freelancers and Insurance
Aside from the fact that with freelancing, money doesn’t regularly get deposited into your bank account, like on the 15th or 30th of each month, just recently, a former colleague who has been freelancing for a while now had been admitted into a hospital for brain surgery. Somewhere between his departure from the corporate world and his foray into freelancing, he unfortunately happened to have developed some type of brain tumor.
What made his story more heart-wrenching is the fact that he failed to purchase health insurance for himself and his family. As a result, his wife, who’s also a freelancer, had to resort to calling on the kind hearts of family and friends for financial assistance. The little savings they had was gone in the blink of an eye.
Sad, I know. Then again, have YOU taken the time to think about health insurance, or life insurance for that matter?
Take a look at Sun Life’s best value for money insurance called Sun Maxilink Prime (insurance with investment)
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You probably are already telling yourself there’s no way in heaven – or hell – that this is going to ever happen to you. If that is to prove true, good for you. But remember, a financial emergency doesn’t always come in the form of a health crisis. It can come at a time you least expect, and in many forms, the likes of:
- loss of a trustworthy client who happens to be your only client
- damaged kitchen pipes, leaking roof
- accident resulting in your inability to work for a while
- loss of property due to a casualty
What you can do right now
If there’s anything that stays the same, it’s the fact that no one can predict the future. Sure, life is short, and others are even calling for the dessert to be eaten first. Still, be aware that with the emergence of modern technology, people are now living longer. And to ensure that you live a financially hassle-free life, consider doing the following right now:
- Analyze your spending habits. Say “no” to mindless spending. Track your expenses on a daily basis. This way, the need to overspend is curbed.
- Educate yourself. Read books on personal finance.
- Don’t take on more debt than you can handle. If you’re deep in credit card debt, do everything in your power to get out of debt as soon as possible. And once you’re out of it, resolve to never get back to it.
- Know the difference between assets and liabilities, needs and wants. Sure, that newly released iPad looks cool, but do you really need it?
- Set up an emergency fund. At least six months of expenses, especially if you have a family to support, is ideal. (read this post on Emergency Fund and watch the video to know more)
- Purchase adequate insurance. Talk to a trusted financial advisor about your insurance needs.
- Live a healthy lifestyle.
- Enjoy what life has to offer, but that doesn’t have to always be in the form of expensive trips abroad. Read a book. Play a game with friends and family. Learn a new hobby.
Final word
The same way your computer – may that be from Novatech or some other brand of your choice – is like an extension of yourself as a freelancer, financial literacy should be your weapon of choice against a volatile and ever-changing economy. This way, you develop some sort of a shield that will render you immune to financial ups and downs that would, at one point or another, come pounding at your door.
