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Dealing with financial anxiety as a freelancer

Arno Yeramyan
June 27, 2022

Switching from a regular full time job to freelancing is as stressing as it is rewarding. After all, freelancers usually go for solo work in order to reach the level of personal freedom and creativity we always wanted. But sometimes the other side of the coin is experiencing financial anxiety that can stem from financial instability.Inconsistent cash flow, unstable clients, delayed payments for projects we completed weeks ago… We can identify such reasons as causes of financial anxiety. While it is common for solo workers to have financial stress, it is also important to know that there are ways to deal with financial anxiety and to cope with the uncertainty that comes along with being a solo talent.

What is financial anxiety?

So what exactly is financial anxiety? Financial anxiety, also known as money anxiety, is the state of mind individuals are in when their financial stability is in jeopardy. While working through uncertain circumstances can be counted as one of the main driving forces behind financial stress, in the context of independent professionals and solo talents, such anxiety can occur for multiple other reasons.Some of the reasons why freelancers might have financial anxiety are:

  • Making less money than the amount of money spent
  • Not having emergency savings
  • Unstable income
  • Getting paid less than average
  • External circumstances (high cost of living, housing etc.)

How does financial stress affect mental health?

For decades, psychologists and mental health professionals warned the general public that stress can affect us in many ways. While a certain amount of stress is a necessary stimulus for reacting to external happenings, continuous, relentless stress often prevents productivity and can be paralyzing and dangerous for one’s mental health. A constant, negative stressor such as financial anxiety can cause;

  • Overall anxiety
  • Outbursts of anger and aggression
  • Unwillingness to socialize
  • Prolonged depression
  • Emotional imbalance
  • Impaired skills of decision making and judgement

How to deal with financial anxiety as a freelancer

From time to time, our financial issues can be so overwhelming that ignoring them or thinking about a permanent career change may seem like a reasonable escape route. But, one thing to keep in mind is that working remotely as a freelancer still comes with a lot of perks, despite the issues all of us need to face.Although freelance work may come along with certain uncertainties that, in return, might cause financial stress and anxiety, there are multiple ways we can put ourselves in a more secure position and have greater control over our solo business. It is true that eliminating financial anxiety takes time, careful planning, sustainable actions and dedication; but there are ways to keep anxiety in check and take actions to prevent it from happening in the future.Some strategies we can adopt to reduce our financial stress are:

  • Securing projects under contracts and service agreements
  • Invoicing properly and compliantly
  • Budgeting, saving and having a back-up plan
  • Utilizing offers and discounts for services and products

Signing secure work contracts / service agreements

Putting your projects into operation under credible work contracts and service agreements will save you a lot of trouble, including financial ones. A work contract is the safest way to state and clarify terms of payment, establish expectations, limits and responsibilities shared by all parties. Service contracts are also the ideal way to prevent future misunderstandings.Moreover, service agreements and work contracts set clear deadlines for payments and legally bind both freelancers as well as the clients, in case of a failure to fulfill duties. For instance, having added a clause about issuing late fees can make freelancers feel financially secure.

Effective invoicing

In the early days of freelancing and remote work invoicing might not have been seen as a major issue, but in today’s world issuing invoices and benefiting from the advantages of invoicing services, such as the one of Ruul, is indispensable!For tax purposes, clients living in countries and regions where VAT applications are in place, are going to want to receive a VAT invoice. By using the invoicing services provided by Ruul, you can increase your credibility, work under more professional terms and work on sustaining long-term clients. Needless to say, having long-term clients is a major way to reduce financial stress!

Budgeting, saving & having a back-up plan

It is true that the financial order of today's world requires us to maintain a positive cash flow, save money, avoid debt traps, put effective budgeting methods into action, think about our own retirement plan and always have a plan B in case hard times come unexpectedly.Depending on your cash flow, years of experience, current savings, client profile and the overall financial situation of the global freelancing market, you may want to start considering how to budget, save money and have more than one plan and strategy. If you are a beginner in things we counted above, feel free to take a look at some of the insightful articles at Ruul blog for some advice.

Look out for special offers and discounts

Freelancing requires every aspect of a business to be managed by none other than the freelancer themselves, including finances. As your business grows, your expenses will also increase. These expenses will usually include digital platforms and services you might rely on to manage your business efficiently. Here, saving money wherever you can becomes crucial for effective financial management.In order to save money, be on the lookout for discount codes and special offers. You can find discounts for services by being a part of a freelancer community. For example, solo workers that use Ruul’s services can benefit from various deals provided by Ruul’s partners. Taking the chance to utilize those will help you reduce your spendings and better manage your costs.

What do we talk about when we talk about financial anxiety?

Remember that mental wellbeing plays a central and important role in having a healthy, satisfying and happy life. Being in a good and healthy state of mind is the key to betterment of other aspects of both professional and personal life.Although financial stress and anxiety can come from multiple external sources, it is possible to control some of these external stressors and decrease the level of uncertainty and stress.Through invoicing and payment features provided to meet the needs of freelancers, certain partner discounts and offers as well as informative articles on its blog, Ruul aims to continue supporting and empowering freelancers.Whether you are a beginner in the world of freelancing or an old-timer who knows the freelance market well enough, we are sure that here at Ruul, you’ll find services, opinions, tips and tricks that help you get accustomed to the world of solo work and have better success at working autonomously!


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