How to be a money-smart slash worker?
The prolonged COVID-19 pandemic has led to a growing number of people turning to freelancing/slashing to earn a living. This phenomena is more common among the younger generation who prefer working in different fields over a typical 9-5 day job..
While having a slash career allows more flexibility, income is less stable than that of a full-time job. My friend, Yammy, is one who manages to strike a balance between making independent choices and earning a living as a slash worker.
Be independent and self-disciplined
Instead of seeking a full-time job, Yammy chose to become a swimming coach/ art teacher/ private tutor/ short film maker/ online shop owner after graduating from university.
“As a slasher, you have to be really disciplined. If you are too laid back, you may have difficulty finding work. It is also important to be prudent and save for rainy days.”
Yammy sets a monthly income goal for herself and is careful with her money. She keeps an emergency fund for things like healthcare expenses, just in case.
“I put more money into my emergency fund during the good months, and less when I am financially tight.”
Seven money habits for slash workers
When you have good money habits, you can become a slash worker and earn a decent living.
1. Saving for a raining day
A lot of people with slash careers do not save regularly due to their unstable incomes. While you should save more in good months, make it a habit to save something, no matter how little, when times are not so good too.
2. Saying no to impulsive buying
While there is nothing wrong indulging ourselves from time to time, we should restrain ourselves from retail therapy and impulsive purchases to avoid unnecessary expenses.
3. Keeping a budget and expense record
Calculate your monthly total income and savings with the IFEC Money Tracker app, and budget based on daily needs. Remember to record your expenses and compare them against your budget to identify any overspending. For instance, if you have splurged on a fancy dinner, you’ll have to cut back on other expenses.
4. Keeping an emergency fund
An emergency fund will come in handy in times of sickness, or when you are earning less than what you need.
5. Get paid ASAP
Request for a deposit when you take on a job and promptly issue an invoice to your client in order to maintain a healthy cash flow as soon as your work is delivered.
6. Reserving money for taxes
Without a stable source of income, you may not be eligible for a tax loan. So don't forget to put aside some money for tax payments!
7. Be a conservative investor
Your investment risk profile is determined by the stability of your job. If you don't have a stable source of income, it is probably not a good idea to take on too much risk in your portfolio.