Initial Considerations3:34 with Pasan Premaratne
It’s best to be prepared before you decide to take control of your own career. Planning can go a long way and in this video we look at how you can budget your time and finances to ease the transition.
After going over both the pros and cons, if freelancing still sounds exciting to you, 0:00 then it looks like you may have found a career path. 0:05 How you start off your freelancing career makes a big difference. 0:08 One of the first mistakes you can make 0:12 is to quit your current job immediately and dive right into freelancing. 0:14 This road is filled with struggles, frustrations, and plenty of anxiety, and soon you will hate freelancing. 0:18 The key is to plan for the transition as much as possible 0:25 and to mitigate any necessary risks so that you can focus on building your business. 0:28 The first thing you want to do is build up your savings. 0:34 Before rushing into any uncertain venture, 0:37 you want to make sure you have your basic needs covered. 0:40 Freelancing won't bring in the same amount of money as your current job from day 1, but you will still need money to survive. 0:43 So, how much should you save? 0:50 That depends on a lot of things, of course, but you can get a good starting point by examining your current lifestyle. 0:53 Start by looking at your basic living expenses. 1:00 How much money do you need to get by from month to month? 1:03 Your current lifestyle might be too lavish and you might need to cut back on certain things until your income can support it again. 1:06 Being frugal is tough, but scaling back for a bit is okay. 1:14 It will make saving for the long haul much easier. 1:18 I recommend planning for 3 months of downtime 1:21 until you get familiar with the workflow and are accustomed to finding clients. 1:24 That way, you can focus on learning the ropes, instead of struggling for money. 1:29 You can do things right without as much of the pressure. 1:33 So at minimum, you want to have 3 months' worth of expenses saved. 1:37 To be fully prepared, you might also want to save up more in case of emergencies. 1:41 Remember that, unlike a steady job, you won't have any sort of benefits starting out, 1:45 no health, or any other kind of insurance, so in the event of a health emergency, you need to have some money saved away. 1:50 But it's not just living expenses you need to account for. 1:57 There's start-up costs, both hardware and software. 2:01 In addition to a computer, you will need to account for the monthly expenses 2:04 of subscribing to the various web apps that you will need to help with your day-to-day tasks. 2:08 Estimate what it will cost per month to have all the tools you need and add that to your budget. 2:14 Now you don't need a formal budget to start out, 2:19 but it's a great idea to go over some of these overheads and establish a rough savings plan. 2:22 Your income from freelancing can be very unsteady, especially when you first start out. 2:28 One month you might make $4,000, the next month $800. 2:33 The way you mitigate this is by building up that cash buffer. 2:37 The second thing you can do is to try and either find clients, projects, or both while you have your day job. 2:41 Start freelancing part-time and take on a few small projects to either build up your portfolio or your client base. 2:49 This way, once you've saved up enough and you're going to make the switch to go freelance full-time, 2:56 you should also have a steady flow of money coming in from regular clients or projects. 3:02 And if things get slow, you will also have other clients you can reach out to to do more work. 3:07 Freelancing sounds perfect for a lot of people, but is very difficult when you first start out. 3:13 It is very important to go into it prepared and you can do that by 3:18 saving up to survive for 3 months without any paycheck, 3:22 budgeting for start-up expenses and any overheads, 3:26 and finally, seeking out clients and work before deciding to do it full-time. 3:29
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