Professional Development

Advice for new freelancers (part 2 of 3)


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This is the second out of the three newsletters I’ll be writing on tips for people who want to freelance full-time!

To recap, the current discussion is about how you can give your freelance business enough time to succeed.

The first newsletter in this theme covered how getting a full-time job first (yes, really) can help you with this. If you didn’t manage to read that newsletter, you can catch up on it here.

Now, on to the second tip:

Build your savings before you start freelancing full-time

Okay, you’ve probably seen this tip in a million other places. It goes:

“Build at least 6 months of savings to tide you through the tough times! Yadda yadda yadda saving for rainy days is super important yadda yadda boring.”

I didn’t understand this advice when I first started looking into freelancing. I was questioning like “Why 6 months? Who decided it should be 6 months and not 5 months?”

But now I get it.

It’s about helping yourself not run out of money while you work on your freelance business (especially if you’ve already quit your job at this point).

If you don’t have to worry about paying your bills for some time, you’ll again give yourself more time to get your business off the ground.

And…let’s be honest. When you’re starting from scratch, your business might take a while to start generating any meaningful amount of revenue.

So, in the meantime, if you’re going to have to use your savings to pay your bills anyway, then why not use the savings you’ve set aside specially for this purpose? Instead of having to take the money from elsewhere, like the money for your upcoming holiday or kids’ education.

And exactly how much should you save?

At least enough to cover your monthly expenses

You should have an idea of this number if you don’t already. Keep track of your expenses over a few months if you need to figure it out.

And if you want to go further, aim to save enough to cover your entire month’s worth of income instead of just your expenses.

This way, you’ll have enough to not just cover essential expenses, but also spend on fun things that make you happy, invest, put towards other savings goals, etc.

You decide how many months’ worth of savings you want to have

6 months is the standard option here. It equates to half a year, which might be a good amount of time for you to give full-time freelancing your best effort and decide whether it’s for you.

But I think the number is a bit arbitrary.

You can adjust this number to fit how much of a savings buffer you want to have. If you’re more risk-averse, pick a higher number.

The usual idea of having such savings is that if your freelance earnings for the month aren’t enough to pay for that month’s expenses/income, you can dip into your savings to pay these.

Another approach is to make your savings your default source of funds for paying your expenses.

In other words, you’ll treat your savings as business capital, from which you’ll pay yourself a fixed salary (that’s higher than your expenses) every month. Regardless of how much revenue you earn for the month.

This way, you can be reassured of having enough to cover your expenses even during bad months. Which can motivate you to keep plugging away at your business.

This approach is more advanced and I’d want to write about it separately to do it justice.

But I typically try to stick to more beginner-friendly topics in my newsletter, so let me know if you want to learn more and I’ll consider 🙂

Otherwise, look out for my next newsletter where I’ll share tips on deciding on your freelance service (and more) 👀

More freelancer news

Life as a self-employed creative, according to Annette Lee

Speaking of going full-time freelance:

It’s been 3 years since Singapore film-maker, actress and musician Annette Lee left her job with SGAG to pursue self-employment, and she’s shared her experience so far in a new YouTube video.

It’s a pretty long video at 23 minutes, but you can use the timecodes to skip to the parts you’re more interested in.

For me, I LOL-ed at 17:07 when she emphasised the importance of filing your taxes properly so you can claim maternity pay and qualify for home loans. (Which is totally true by the way)

But you may find other issues like these more interesting:

  • 12:27: How she decides which projects to take on
  • 14:24: Breakdown of her income sources
  • 20:53: Her greatest joys and difficulties, and whether she has any regrets about taking this path

Foreigners need work passes to be self-employed in Singapore

As the title says!

Some foreigners in Singapore have recently been charged in court for working as (self-employed) food delivery riders without holding a valid work pass for taking on self-employed work.

If you’re a foreigner, you can find a list of work passes for working in Singapore here.

For example, if you’re in Singapore on a Dependant’s Pass, you can apply for a Letter of Consent to operate a business in Singapore.

This post was first published in my email newsletter on 28 Sep 2023. If you liked it, you can sign up for my newsletter here:

Tan Siew Ann
I’m a freelance writer for some of the most amazing software businesses in the world. On this blog, I share tips on how you, too, can run a sustainable and meaningful freelance business. Let’s forge your freedom. 💪

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