Staying In The Black: Budgeting Tips For Freelancers

One of the benefits of having worked for a media agency is that the concept of measurable ROI has now become engrained into my thinking. In fact, we can potentially apply this to all areas of our life - from what we eat and how we exercise to the types of relationships we build and keep. But a more obvious application would be how we apply this concept to our personal finances.

A few weeks ago, I decided it was time to take control of my finances and recognize that the only thing I could change in the immediate future were my spending habits. Like any strategist, I delved into research, conducting my own personal behavioral study. The internet told me that Toshl Finance was the best spending tracker and budgeting app.

So I downloaded the app and inputted a weekly, optimistic budget of $150. Despite having Mint for the last few years, I found the act of inputting my expenditures curbed my spending habits immensely. Instead of having black holes of "cash & ATM" littering my Mint account, I had a detailed history of where my money went. I initially decided to leave off the one off's - a prescription, new frames, etc. because I couldn't handle the truth. Finally, I took the plunge and upped my budget to $200 a week, vowing to input every last penny. In the process of discovering my spending habits, I changed my behavior. Suddenly, one drink I didn't need in the first place didn't seem as appealing if it threatened to tip my weekly budget into the red. I even bought an espresso maker with my credit card points. I finally convinced myself that the experience of standing in line at the cutest café, surrounded by French people, was not worth a potential $20 a week, $80 a month or if I really wanted to make a point - $800 a year. And not contributing to a landfill with my cup usage was an added motivator.

But more importantly, now that I'm freelancing, I can develop a road map for what I need to achieve to stay in the black instead of the less organized approach of living job to job. Plus, this time around, I can be realistic and base my budget on my actual spending habits instead of making up an imaginary number as to what I hope to spend per month. By adding up my fixed costs; rent, health insurance, gym, mobile phone, etc. with my newly discovered monthly spending number, I can get a very solid idea of what I need to stay in the black. I took that number and divided it by my hourly rate and day rate. I now know that I need to work 100 hours a month or 22 hours a week, or 10 days at my day rate in order to achieve my desired income. And obviously this is a best case scenario but it still gives me a good idea as to how I'm doing with gaining clients. As a freelancer, you are your own biz dev, which means I'll need to spend at least 40% of my time developing my own business to attract clients, and the other 60% working on actual client work. I'm looking forward to the challenge!

How to Make It In New York City

Last week, I reentered the unpredictable world of strategic consulting. I'm excited to work with clients across various verticals and disciplines, conducting research and providing both insights and strategic direction to impact their business and help them better engage with their consumers. It's increasingly apparent that a full time position only offers the illusion of stability in today's economic climate. In fact, every time I get LinkedIn updates from my network, half the updates show that someone has gone freelance; whether by choice or layoff, I cannot say. I'm sure universal health coverage will accelerate this trend. A recent New York Times article pointed to a Gallup study that found

"Among the 100 million people in this country who hold full-time jobs, about 70 percent of them either hate going to work or have mentally checked out to the point of costing their companies money — “roaming the halls spreading discontent,” as Gallup reported. Only 30 percent of workers are “engaged and inspired” at work."

While a full time position can offer (often) measly health benefits and the continuity of working with the same colleagues and clients, employees start to get too complacent, failing to maintain their network and nurture their reputation outside the company. And then they find themselves on the chopping block, without an updated resume or wealth of contacts to help them land their next gig.

So after surrounding myself with successful people, absorbing any hearty advice I come across and attending as many educational events I can fit in, I've narrowed down a few rules for becoming a successful consultant or protect ourselves from a lengthy unemployment. Through social media especially, we have the power to shape our own brand, so that if we do end up on the chopping block, we have enough contacts, credibility and experience to turn that snafu into an opportunity.

1. Solidify and properly convey your story. Everyone you come across wants to understand where you came from in order to better connect. Figure out what makes you tick - and how those insights led to where you are now. My story is that I've always had a deep fascination with people from the time I was in high school, taking advanced life-drawing classes, to a long history of street and portrait photography. I translated this passion into consumer insight-driven strategy, working with brands to better understand their consumer's motivations and habits to grow their business. Michael Margolis from Get Storied, believes that often something that happened when we were between 8-10 years old shaped who we are today. Growing up in a bi-religious household, in an ethnically diverse town shaped my fascination with people and their cultural influences. Yearly trips to an American enclave in the middle of Mexico solidified this interest.

2. Establish your credibility. As the return of investment of MBAs increasingly come into question, entrepreneurs have sought new forms of establishing credibility among their clients. First and foremost, be authentic and honest in your business dealings. Put 200% into every client you work for and only do your best work. Extend the brand of you through speaking engagements, teaching (Skillshare), public presentations (Slideshare), writing articles and working with respected clients. Document your achievements and get permission to publish any positive client feedback.

3. Grow your network. Relationships are the glue that hold a successful career together. A strong network can offer mentorship, job opportunities and emotional support to navigate ones career. When we are passionate about our career, we find genuine connections with people in our industry. Maintain these connections regardless of your current employment status and make sure to give back or pay it forward. I have had the good fortune to have numerous people help me along the way. The best way to reward a mentor is to immediately incorporate their advice and achieve success doing so. The knowledge that they made a positive difference in someone's life and will pay it forward, is reward enough.

What advice have you been given that's been critical to your success?