No one knows exactly when the next recession will hit. It could be five years from now, five months from now, or it could take shape as a result of the recent coronavirus scare. One thing’s for sure, though. A financial downturn will happen eventually and another recession is on the way. Unlike previous recessions, though, many current professionals operate as freelancers. Working as a freelancer provides a number of advantages, but it can also be quite challenging in some ways as well. Here, we’ll explain everything that freelancers need to know to manage their finances during a recession:
Start Saving Now
It’s never too early –– or too late –– to start saving up for the future. While “traditional” nine-to-five employees may benefit from employer-supported 401ks and health insurance, freelancers have no such safety net. That’s why it’s crucial to build up a substantial savings fund now. Living paycheck-to-paycheck might work out if you can rely on a steady stream of income. But if a recession affects your ability to generate personal revenue, then it’s imperative to have enough capital saved up to cover essential expenses.
Lean on Relationships
The best freelancers don’t wait around to find work. During a recession, it’s unlikely that many companies will actively search for extra support. And jobs that do get posted on sites like Upwork will probably go quickly. As such, it’s a smart play for freelancers to develop positive working relationships with business leaders in their field. This will allow them to check in and get the inside track on projects or assignments during lean periods. In business, who you know matters almost as much as what you know.
Expand Your Skill Set
Working in a niche field can be a solid way to start your career as a freelancer. However, if you want to improve your viability, you’ll have to expand your skill set so that you can take on new jobs as they hit the market. This could include almost anything –– from learning about the RFP process to enhancing your writing abilities. Don’t hesitate to learn new things because they could come in handy one day!
Talk to an Expert
Unless you’ve spent years studying economics, you may not understand everything there is to know about managing resources during a recession. Indeed, it is possible to not only survive a recession, but to thrive under such conditions. You just have to have a plan in place and know how to execute it. It makes a lot of sense for freelancers to enlist the help of a financial planner. They can create contingency strategies and explain how to create an effective investment portfolio regardless of the state of the market.
Bottom line: don’t be afraid to reach out for help if you need it!
