The bottom line is, balance sheets, gross interests are all terms you may have heard but are they really important?

In short, here's what you need to know: 

Tips

• To have the freedom to do what you want, when you want, you will need to do the following:

• Monitor everything you’ve subscribed to and ask yourself: 

do I really need this? 

• Build a spreadsheet with all your expenses, your income and outgoings. 

Defining your income

Once you have this you can work out what to cut out and what to do more of, which also builds a balanced idea of how you spend your resources and how much enjoyment those things bring. 

• What is the figure you need to make to be thriving, what is that number?  Here’s a way you can work this out simply:

Define that number for what you want to make a year, divide this by 12 (months), then by 4 (weeks), then again by 5 days a week. This figure is your daily amount you need to make. 

Now, divide that by the number of hours you work that day on average; this is your hourly wage you should be charging your clients at a minimum. Now that’s a place of comfort to be at.

Expenses

• For expenses, add in the cost of anything extra you want in your life, a holiday, a new car, additional gear etc. Add in the cost of these items and adjust accordingly.

• Now that you have this figure, you have a clear vision of every penny, cent and peso. This financial clarity will ensure you’re always keeping an eye on your business succeeding. 

My recommendations

For accounting solutions for freelancers and small businesses check out:

Xero - Online accounting software for your small business.

Coconut - The financial companion for self-employed people.

Wave - Award-winning financial software designed for entrepreneurs.

Action

Open a new spreadsheet, go through the process above and adjust your day rate according to that amount. 

Then use the quote generator to quote your client on the next project, according to your new day rate that you are championing.

To financial freedom,

NK