If you’re a freelancer or an umbrella service contractor you need to stay atop your finances, warns one leading industry body.
The flexibility that goes along with being an interim worker is one of the biggest advantages of self-employment. However, because you do go from project to project as a contractor or freelancer, you’ve got to be constantly aware of your finances, as your pay differs from a permanent PAYE position and you don’t have the luxury of knowing you’ll be getting the same income week after week or month after month.
This may be hard to think about if you’re busy with a shedload of clients, as it’s difficult to imagine your revenue stream drying up. Still, you need to ensure you have some cash put away for that rainy day situation, whether it be clients that are sluggish to pay or a sudden drop off in business volumes, warns the Professional Contractors Group.
The industry body says that flexibility is key, not just in your ability to work your own hours and on whatever projects you like, but also when it comes to your finances. The PCG stressed the fact that you can’t predict how the markets are going to develop, as even the best analysts and market forecasters have been wrong time and again – especially in the current economy.
The best thing you can possibly do is to open a savings account and make modest regular deposits over time to act as a cushion in the event of a financial emergency, said the PCG.
