The last two years have not been the best for freelance savings. The pandemic brought with it a reduction in income and a completely unexpected increase in expenses. However, freelancers have a great opportunity to save money in 2022.
Although the new year will bring several cost hikes for freelancers, experts predict that 2022 will be a perfect time to start saving, if you haven’t already started doing so. The reason for this is that there is expected to be an upturn in economic activity, so income will increase.
Hence the big challenge for freelancers: to save money in 2022. From Befree we offer you some recommendations to achieve this goal.
Get familiar with pre-saving
This piece of advice is based on a simple premise: if you don’t see the candy, you won’t be tempted to eat it. Pre-saving is an automatic savings method that consists of saving at the beginning of the month instead of at the end.
Also known as paying yourself first, it’s similar to paying your bills at the beginning of the new month. You should determine how much money you want to save by analyzing your expenses and income. A good starting point might be 5% of your salary.
The best way to do this to save money in 2022 is to automate a regular transfer from the account where you receive your income to a savings account. It will only take you two minutes thanks to online banking, and you will forget the tedious worry of having to do it manually. This way, at the beginning of each month you will always have saved the same amount and you will be able to use the remaining money without any remorse.
Dare to take on a saving challenge
Perhaps if you turn saving in 2022 into a game, it will be easier. Getting into a habit is complicated and takes time, but using some mechanics like this could be the definitive turning point.
We present two different and easy-to-do challenges for you to choose the one that best suits you. The first is the 52-week challenge. It consists of saving each week the number of euros corresponding to the number of the week you are in. In other words, in the first week you will save one euro, in the second week you will save two euros and so on until you reach 52 euros in the last week of the year.
At the end of the year you will have saved a total of 1378 euros. The advantage of this challenge is that it requires a very progressive effort. During the first months you will hardly notice the effort, and in the last weeks the habit and inertia will do their job so that you don’t give up in your efforts.
The second challenge is a shortened version of the previous: the 30-day challenge, and instead of saving for a year, you will do it in a single month. The mechanics are similar. You must save one euro for each day of the month. Thus, on day 1 you will collect one euro, and on day 30, thirty euros.
Once the challenge is over, you will find yourself with a total of 465 euros saved. This is a shorter formula, so there is more chance of completing it, but very demanding, as the savings are more aggressive in less time. To tackle this, you could do the challenge in reverse: start by saving thirty euros and end up saving one on the last day of the month.
Create an emergency fund
Unforeseen events are the main reason why people are unable to save regularly each month. The broken washing machine, the refrigerator that doesn’t cool or the car that breaks down and costs an arm and a leg to repair are completely incompatible with being able to put money together little by little.
However, this should not be the case. Saving in 2022 needs to go hand in hand with the creation of an emergency fund, a financial cushion. This will allow you to deal with any unforeseen expenses without causing a tragedy to your budget.
The emergency fund is not only a good way to manage your money and be able to save without having to worry about costly unforeseen events. It will also bring you a degree of peace of mind and security that will make your life easier. You will avoid getting into debt and you will not stop your savings plan at any time.
To create it, you must study your income and expenses to know how much you can allocate to your emergency fund. Financial books recommend a minimum of three months of your expenses and a maximum of six months for your total emergency fund.
Conscious spending: spend wisely
Lastly, this is a concept that will help you to approach your savings differently in 2022. It is about putting your money and spending it on what you really care about and are passionate about. As a result, conscious spending makes money a tool, a means, not the end.
Let’s say you love soccer cards, for instance. It was your passion when you were a kid and you’ve managed to keep it to this day. So, you spend a lot of money on buying envelopes, as well as ordering online the ones you don’t get or the special cards. For some people it may be silly, but you are spending your money on what makes you happy.
In addition, conscious spending comes hand in hand with adapting your expenses. That is, you invest a lot of money in the cards, but in return you will always be saving in other areas, such as meals at the office.
