Among the many other benefits of freelancing, cracking money-spinning projects and making more money than a full-time job is the best of all! However, a major drawback of freelance jobs is the variable income, making it challenging to track expenses and create savings funds. If anything can truly help you streamline your finance management and make progress in your freelancing career, then it is an effective budgeting app!
Budget tracking tools can help you calculate your total earnings for the month, estimate the expenses, and ensure financial security in the long run. Do you want to explore more? Then stay tuned!
6 Ways a Budgeting App Can Help Freelancers in Tracking Their Budget
Freelancers should be very specific about budgeting to lead a peaceful life, free from any approaching financial threat. With built-in tracking tools, emergency fund creation facilities, and pro budgeting tips, a budget planner app helps you to stay within your budget in the following ways:
1. Track your variable income
Unlike salaried employees, freelancers do not have stable or fixed incomes. The pay depends on the projects they have, which is why keeping track of the income and creating a budget becomes a task of hassle. A money budget app can help input all the financial data in one place, allowing you to calculate your entire month’s welcome with ease.
2. Manage and categorise your expenses
Then, add the details of the necessary expenses that you need to spend each month on the budgeting app. This includes the grocery, rent, electricity bill, entertainment, etc. Don’t forget to add the work equipment to the list of expenses, including software subscriptions, broadband connection costs, marketing costs, etc. Make separate categories and enlist them accordingly.
Tracking expenses alone cannot help you to stay within your budget! You need to set a maximum spending limit. When you almost reach the limit, the app will send you an alert. Doing this can minimise your spending habits, saving money for the days with less pay.
3. Conduct Project-based Budgeting
If you wish to create project-based budgeting to evaluate your profit from individual projects, your chosen money-budget app can help in every mean! Most of the reliable budgeting tools come with a special feature that permits you to monitor your income project-wise, guiding you about the highest return individually from the projects you handle.
In case any new projects are added or any existing project is withdrawn by the client, you can check them from one single location and make informed decisions regarding your expenses and resource allocation.
4. Create a Buffer Fund
Freelancers no doubt have a better monthly income than full-time workers, but they are likely to go through hectic phases more when business remain down. To ensure financial security in those time frames, you should pay attention to creating a buffer or emergency fund. Just create a savings fund on your budget planner app, and it will take care of the rest.
Once you connect your budget tracking tool with your active bank account, it will automatically detect an amount from your bank and transfer the money to the in-app fund. You can customise both the date and the amount you want to transfer. Some apps let you calculate and manage your taxes based on your monthly income. In fact, you can also set an alert so that you never miss out on paying your taxes on time.
5. Tax Planning
Salaried employees do not need to go through the stress of tax planning as mostly their organisation plans it on their behalf. But when you work as a freelancer, you need to keep a keen eye on the tax management on your own. In this case, a budget app can be helpful.
6. Set Financial Goals
Budgeting apps let you set personalised financial goals and help you in all the ways to achieve them. Be it planning for a big purchase or retirement, a budget tracking tool can accompany you to accomplish your financial goals. It will ensure long-term financial stability, and monitor the progress of your goal, blessing you with a successful career as a freelancer.
These apps help generate extensive financial reports, giving you a clear insight into your total income, expenses, and savings. This way, you can make informed decisions to improve your financial performance and well-being.
Wrapping Up
Staying consistent in following a healthy budget plan is the key to a worry-free and successful freelancing career. If managing your expenses manually seems overwhelming, you can always switch to using a budgeting app. From calculating your variable income to finding ways for emergency savings, these tools aid you in all possible ways. However, for better results and to track your cash flow flawlessly, you must input all necessary information regarding your budget and small to big, every expense. You can also consider following expert budgeting suggestions provided in the app.
