I struggled to manage my freelance cash flow before using credit cards

I’m a kind of uncommon and fortunate individuals who has a job that she totally loves. I’m a freelance author and have a strong enterprise delivering content material advertising, journalism, and different writing providers. I’ve been at it for 5 years and have grown a profitable enterprise.

It’s even higher now that I’ve began using credit cards to manage one in all my largest ache factors in my profession: cash flow.

Using credit cards responsibly to pay my payments has helped me even out the highs and lows of self employment. This eradicated one of many largest stressors related to my job. Here’s the system that works for me:

What I earn and what I’m paid do not at all times match up

In most fields, you do your work, then accumulate a paycheck on a date that you understand nicely prematurely. Two weeks later, you are getting paid once more. I haven’t got that predictability. I bill as I submit my work. Depending on the consumer, fee is due 30, 60, and even 90 days after a challenge is full. Other purchasers pay me after a challenge is revealed, which could possibly be months after I end the work. This is made worse by purchasers paying late, which is unfortunately typical within the trade.

This leads to quite a lot of uncertainly in my cash flow. I can management how a lot I work and the quantity I bill in a sure month, however I cannot management when purchasers pay me. On a latest month, for instance, I invoiced for greater than $10,000, however was paid for lower than $eight,000. Having 20% of your revenue caught up in billing could make managing your cash troublesome.

I use credit to construct predictability

For years I would switch cash to financial savings, or pay a big quantity on estimated taxes as a result of I was anticipating to obtain extra checks before my payments have been due. However, this typically got here again to chunk me when purchasers paid late. I would then scramble to withdraw from financial savings to pay payments.

I realized that I may use credit to have extra management over when I paid payments. I started paying my mortgage and scholar loans originally of the month with cash (since these can’t be paid with credit). Then, I put nearly all my remaining payments and spending on my credit card. After that, I may breathe straightforward: Even if purchasers paid late, I knew all my payments have been paid on time.

When checks got here in for the remainder of the month, I instantly paid these funds to the credit card, till my month-to-month bills have been lined. Even if I got here up quick due to a late consumer fee, I was paying minimal curiosity to maintain just a few hundred on the cardboard till I acquired a verify. I determined the expense was well worth the peace of thoughts my new system gave me.

I received an sudden profit in journey rewards

When I began this course of, I had just a few credit cards from previous banks and my present credit union. However, that they had comparatively low limits, and no rewards. If I was going to use credit this a lot, I wished to make it work for me.

After researching my choices for rewards cards, I opened a Capital One Venture Rewards card. With this card, I earn journey miles from purchases that I could be making anyway. When I began using a credit card to higher management my cash flow I was wanting to decrease stress, nevertheless it seems that I was additionally ready to make the most of this sudden profit as nicely.

With the sign-up bonus of 50,000 miles (which is topic to change), I was ready to e book about $700 in free journey through the first quarter of using my system. These have been journeys I would have been taking anyway, so using credit card factors gave me an enormous financial savings.

Credit cards are a person answer to a much bigger drawback

As the self-employed proprietor of a small enterprise, I anticipate to encounter cash flow points. I know what occasions of yr are busy for me, and lower your expenses for the slower seasons. However, as well as to this there’s the added problem of dealing with purchasers who pay months late, a widespread concern for inventive freelancers. Hopefully, this adjustments as individuals give extra respect to creatives and other people working within the gig economic system.

In the meantime, I’m glad to have discovered an answer that works for me.

Source link Businessinsider.com

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