Now that half the year is gone, it’s a good time to take a look at your situation to see how you’re progressing towards your goals. That includes doing a finance check-up.
Here are eight things you should consider when conducting your mid-year freelance financial review.
1. Progression toward your salary goal.
You should have started the year with an idea of how much you hoped to earn.
Divide that number by two.
Hopefully you’ve made that much money so far this year.
For example, if your salary goal was $100,000 for this year, ideally you'll have brought in $50,000 so far this year, putting you halfway towards your goal by the middle of the year.
If you’ve fallen below the halfway point, that doesn’t mean you won’t reach your goal. Similarly, making more than the halfway amount doesn’t guarantee you’ll meet or exceed your salary goal.
Knowing where you stand will help you adjust your plans for the second half of the year to give you the best chance of reaching that goal.
Not sure what your target yearly earnings should be? Use the All Freelance Writing freelance rate calculator in its advanced mode to account for your financial goals, expenses, and more.
2. Your current rate
Checking your rates once a year isn’t often enough.
Since you’re looking at all your finances anyway, now is a good time to assess your rates to be sure you’re charging what you’re worth and that you’re charging enough to cover your expenses.
If you find your freelance schedule is always full, that's a good sign you might be under-charging. If so, consider raising your rates moving forward.
3. Your personal and business budgets
Things change throughout the year. Now is a good time to review your budget to make sure it matches your situation.
If your income or expenses have changed, adjust your budget to reflect that.
If you’ve gotten married or divorced, had a child or recently became pregnant, you’ve lost a major client, bought a house or car, or paid off some credit card debt, adjust your budget to reflect that.
4. Your spending
If much of your spending is done through your checking account, you can use a free online tool like Intuit's Credit Karma to help analyze your spending. (Note: This tool includes features formerly featured in Mint, which was acquired recently.)
Compare your monthly spending to your budget to be sure you’re sticking to your plan.
5. Your estimated taxes
If you’re making more money than you thought, you might need to adjust your estimated tax payments.
Otherwise, you might end up underpaying and could face additional taxes and a penalty next April.
Overpaying is undesirable, but if it happens you won’t have to pay a penalty on the amount you’ve overpaid.
6. Retirement savings and other investments
If you haven’t started putting money into savings either for retirement or an emergency fund, it’s never too late to start.
Use your budget to figure out what you can afford to set aside each month.
If your current income doesn't leave you with anything for retirement, it might be time to raise your rates or seek new clients. Start with the All Freelance Writing Job Board and Writer's Market Database.
7. Holiday savings
I know the year-end holiday season is six months away, but that’s why you should start saving now.
It will take away the last minute pressure of coming up with extra money for gifts.
8. Your credit report
You can now get a free credit report weekly from AnnualCreditReport.com.
This is the only site that allows you to order your free credit report that’s outlined by Federal law. Other free credit report websites might require you to enroll in trial subscriptions that you’ll need to cancel in a few days to keep your credit card from being charged.
Check your credit reports often to make sure all the information included is accurate.
How are your freelance finances going so far this year? Is it time for a fresh finance check-up?
Note: This post was originally published on July 5, 2010. It has since been updated and republished on its currently-listed publication date.
