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How to Maximize your Return on Freelance Work

How to Maximize your Return on Freelance Work

Freelance work may be one of the more difficult ways to make a living out there. Between tax headaches, feast-and-famine cycles, and sometimes having to undertake tasks that either don’t pay well enough or are just plain uninteresting, freelancing can often seem like an unnecessarily tough way to make a living. However, there are some measures you can take to be successful and still work on the schedule that suits your lifestyle and income needs.

1. Know the value of your work.

This crucial first step is where many freelancers make a mistake that can haunt them for months or even years. Sit down and make an honest evaluation of your skills and what you bring that makes you different, better, or more capable than others. Once you have done this, look into what others are charging for comparable services. If you can do better than they can for less, this will give you a good starting point to set your rates. Your clients will want to negotiate, and if the level of work makes it worthwhile, then by all means, do so. Otherwise, don’t be afraid to stick to your guns. Remember, you’re trying to create a mutually beneficial situation. That won’t happen if the client has final control of your payout.

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2. Treat your job like a job.

Freelancing seems like a fun way to make money in the short term. The problem is, especially if you are working on the Internet, you will have to structure your time so you can best serve your clients. When your clients are largely in the same country as you, this is one thing. However, especially when you are working from a different continent, you may need to be willing to make some concessions in your schedule. This will make it more likely you will get more work, because your clients will appreciate the extra effort you put in to accommodate them.

3. Manage your time wisely.

Procrastination is the enemy when it comes to working as a freelancer. Many clients schedule tasks for the quickest possible turnaround. Do not be afraid to tell a client you need more time to complete a project if the restrictions are unreasonable or you’ve run into a snag, but it is vitally important that you don’t abuse this. Most clients are willing to be understanding if they ask for something that is simply impossible, but if you blow off work for the beach, word will get around.

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4. Be clear on the requirements.

If there are any vagaries in the client’s requirements, don’t be afraid to seek clarification. For example, a client who agrees to pay $30 per 1,500-word article and orders a 15,000-word article but keeps the price the same was either not paying attention or hoping to get the maximum work for minimum payout. If possible, have a contract in place with the client specifying your rates for different lengths or types of work. Remember to allow a little wiggle room for extra research, time, or effort on your part.

5. Don’t forget about taxes.

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13 Freelancers, Good and Bad, Which Are You?

    Tax laws and requirements vary from jurisdiction to jurisdiction, but one thing that’s universal: You will have to pay them. Be sure to set aside an appropriate percentage of your income monthly, quarterly, or annually. It is generally better to pay monthly and overpay, at least under the US tax code, to avoid having to pay a larger lump sum at the end of the fiscal year. Independent contractors usually start at 30% for taxes, so being able to set aside 40-50% per pay period is ideal to avoid penalties and ensure a return at the end of the year.

    6. Sell yourself.

    Think of taking on new clients as a job interview and emphasize the talents you have that make you a better fit for a client’s needs. You are trying to market yourself to the client as the solution to their problems. At the same time, you need to make sure the people you are working for are going to be a good fit for you as well. This will help avoid friction and create a more harmonious working relationship. Be confident and clear about what you can deliver, as well as what client support you will need to be as productive as possible. By setting clear expectations, you can avoid a lot of problems before they ever have the chance to become problems.

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    7. Network, network, network.

    Being a freelancer can be hard work. Bearing this in mind, networking is critical to your success. Seek out new opportunities and ask current clients for references. Sites such as LinkedIn and Google+ are good for making connections. Also, don’t be afraid to ask for referrals or to renew a contract when the work is done. This may sound gauche, but there’s nothing wrong with “overhearing” someone at a restaurant, bar, or on the street mentioning they need exactly what you do…and stepping in to offer your services! The worst they can say is no, and you’ve just gained a new opportunity to prove yourself.

    8. Be a pack rat.

    Always hold on to copies of anything you do for a client, invoices you generate, payment records, contracts, receipts, and communications. Not only are these helpful for generating a profile of your capabilities, but it also makes tax and other record-keeping simple and efficient. Having a good organizational system that allows for at-a-glance order tracking and monitoring is imperative to keeping appropriate records. It’s also great for task management! Hold onto these for no less than three years after the contract is terminated, just so you can reference them if necessary. And ALWAYS keep a hard copy, because one virus and your great organization is trashed. At a minimum, you should keep copies of your records on your hard drive, in a filing cabinet, on a detachable stick or other drive, and it’s never a bad idea to email yourself copies of everything at least monthly. This ensures you have the information in a number of areas at the same time, so a catastrophic loss here won’t affect your data there.

    By following these 8 simple steps, you can maximize your freelance work return in no time!

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    J.S. Wayne

    J.S. Wayne is a passionate writer who shares lifestyle inspirations and tips on Lifehack.

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    Last Updated on March 3, 2021

    Top 6 Hacks on How To Build Credit Fast

    Top 6 Hacks on How To Build Credit Fast

    When done right, credit can open doors and provide a lifestyle that you never imagined possible. Anything from flying around the world in first-class and staying at 5-star hotels entirely for free to starting and scaling businesses. It’s also an area where it can be easy to make mistakes and hard to recover from without the right information. In this article, I will break down how you can build credit fast so you can open doors in your life!

    When you start to think about improving your credit score, you have to answer three important questions first:

    1. What are you trying to achieve by having good credit?
    2. What really is your credit score?
    3. How is your credit score calculated?

    What Are Your Credit Goals?

    Having a high credit score is great, but ultimately, your credit score is a tool in your personal finance arsenal that you can use to open doors. The first question you should ask yourself is “what will a higher credit score do for me?”

    I work with many clients directly at Freedom Travel Systems to help them fully leverage the power of their credit so they can enjoy free luxury travel and start or grow their business. For my clients and many others, here are a few common goals many credit-savvy individuals have:

    • Free Travel – getting access to travel rewards cards so you can get tons of free travel and even get first-class flights, hotel suites, and luxury amenities all for free
    • Start/Grow a Business – getting access to business credit so you can start and grow a business with 0% or low-interest financing that does not impact your personal credit
    • More Approvals – getting approved for credit cards, auto loans, or mortgages so you improve your lifestyle or build your personal wealth
    • Better Rates – getting better interest rates on any loans you get will save you tens or hundreds of thousands of dollars over your lifetime

    What Is Your Credit Score?

    Your credit score is simply a 3-digit number that tells potential lenders how reliable of a borrower you are. Keep in mind that lenders, such as banks and credit issuers, stay in business by lending. Their goal is to find the people that have the highest probability of paying them back and they assess this primarily through your credit score.

    What’s important to know is that there are two major scoring models used to create your scores. These scores are your FICO Score and your Vantage Score. More than 90% of lenders rely on your FICO score, so when you are checking your score, you want to make sure you see the actual score that the lenders use. And no, checking your own score does not hurt your credit!

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    Then enters the 3 main credit bureaus, which are essentially agencies that collect credit information on you. These are Experian, Equifax, and TransUnion. These bureaus then apply a scoring model to the information they have on you and voila, you now have a credit score! Bureaus sometimes have different information on your report, which is why you will see 3 different scores.

    How Is Your Credit Score Calculated?

    Next, you need to understand how the credit score is calculated. This will provide a high-level overview, but there is more detail to each of these factors alone.

    There are 5 main factors in the calculation of your credit score:[1]

    1. Payment History (35%) – This refers to the amount and percentage of on-time payments you have.
    2. Utilization (30%) – This is how much revolving credit you use as a percentage of the total revolving credit issued to you. Note that installment loans like auto-loans or mortgages do not count towards this while credit cards do.
    3. Age of Credit (15%) – This refers to how long your credit history is, primarily your “average age.”
    4. Credit Mix (10%) – This is how many different types of credit you have. For example, there are credit cards, student loans, auto loans, mortgages, personal loans, and lines of credit.
    5. New Credit (10%) – This primarily refers to how many inquiries you have for new credit.

    Top 6 Hacks on How to Build Credit Fast

    Now that you’ve learned more about your credit score, here are the top 6 tips on how to build credit fast.

    1. Don’t Close Your Cards

    Many of us are taught that getting a new credit card is bad and having too many will hurt your score. In fact, the opposite is true. You want to have many positive accounts reporting to your credit report. Logically, this makes sense because having more accounts with more on-time payments shows that you are a more reliable borrower. You just don’t want to open too many accounts too quickly since that can hurt your “new credit” factor.

    Instead of closing a card, what you should do is simply keep the card open and put a small subscription service on it monthly. Why? Because each time you have an on-time payment, it helps build your payment history, the largest factor of credit.

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    If you close a card, you are missing on potential on-time payments, age of credit, credit mix, and also lowering the total credit lent to you so your utilization percentage may go up. If you have an annual fee on a card you don’t like, see if there is a “no-fee” version of the card and downgrade it to that card rather than close it.

    2. Use Autopay to Never Miss a Payment

    This one is easy to do and easy not to do. Go into your credit card account and set up auto-pay. You can choose to either pay the full amount, the statement balance, or the minimum payment. Personally, I like to set up autopay to pay the minimum payment so that I never get a late payment. Then, I go in and manually pay the statement balance each month by the payment due date.

    This helps me personally see my spending and have a manual review of my charges while ensuring, not have to pay interest, and still get the benefit of making sure that I never miss a payment if something goes wrong. Think about it, if you were to have a medical or family emergency, the last thing you want to experience on the back end of that is a late payment and a drop in your credit score. So, set up autopay.

    A pro tip is to update your payment due dates across all bills and accounts to be the same so that you can “time batch” the process and have one time a month where you sit down and handle your payments. You can do this by simply contacting the credit card company or doing it online.

    3. Get a Credit Limit Increase to Lower Your Utilization

    One of the factors that get most people into trouble is using too much of their allotted total credit. Their utilization, which is the percentage of revolving credit they use, goes up, and their score tanks. You should aim for less than 30%, and in an ideal world, less than 10%.

    To help drive this down, call your credit issuer and ask for a credit limit increase. This will help increase the total amount of credit extended to you and drop your utilization. Oftentimes, they will only give it to you when your utilization is fairly decent (less than 50%), so work to pay it down as best as possible before doing this. You should ask if the credit limit increase will give you an inquiry as some banks do a hard inquiry while some do not. If they do a hard inquiry, it is often better to just get a new card altogether or pass.

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    4. Add Authorized Users to Increase Your Age, Add History, and Decrease Utilization

    This is one of the best hacks out there as it helps with the 3 biggest factors of improving your credit: payment history, utilization, and age. This concept is also called “credit piggybacking” where someone with great credit history on a card adds an authorized user (AU) to the card. When the AU gets added, the credit history and information from that card are added to the AU’s report!

    This is extremely helpful for people with young credit because it can drastically increase your age of accounts. It can also help many people with limited payment history or high utilization.

    Please be aware that anything good or bad on that account you are added to will show up on your report. So, you want to avoid any cards with negative marks or high utilization. That being said, it is a one-way street, so nothing that you do with your credit can impact the primary account holder.

    This is so valuable that there are companies that sell AU accounts. I always suggest starting with your family and/or personal network first as there are likely people in your network that can help!

    5. Space Out Your Application Strategy

    New credit is the smallest factor of credit, but it still matters! If you are looking to build up your credit, you should space out your applications. If you apply for too much credit in a short period, it looks very needy in the eyes of the lenders. For this reason, it is safest to apply for cards slowly over time unless you have really studied more in-depth how this works. A good rule of thumb is once every few months.

    If you are in the credit game for the hopes of getting tons of credit card points for free travel, which is what I personally take full advantage of, you will want to familiarize yourself with the different bank rules and card promotions to put together the right application strategy. Applying blindly will waste inquiries and leave tons of benefits on the table!

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    6. Review Your Report for Negatives

    If you have any negative or “derogatory” marks on your credit report, this will hurt you drastically. They do impact you less as they age, however, you should review your credit report to ensure that everything on your report is 100% accurate and actually yours. Wrong information ends up on credit reports all the time and you will want to take personal responsibility for making sure it is accurate.

    The “burden of proof” is on the credit bureau to confirm that any information on your report is in fact accurate. If you find inaccuracies, you can dispute that with them, or you could consider getting a credible credit repair company to help you.

    Final Thoughts

    There you have it, the top 6 tips on how to build credit fast so you can get closer to reaching your goals. Now that you’ve learned more about how credit score works and how you can improve yours, you’ll hopefully be able to make better financial decisions and achieve your financial goals quicker.

    More Tips on How to Build Credit Fast

    Featured photo credit: CardMapr via unsplash.com

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