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“I’d rather keep working in the hope of getting paid than stop working and know I’m not going to get paid.” These words, from a friend of mine who’s not getting paid by the company she’s freelancing for — the only project she has right now — might shock you if you’re on a nice steady cashflow. But if your income isn’t so stable, you might be able to relate to her sense of desperation. Though I know no one’s immune from a recession, this conversation made me think about my own approach to the financial side of what I do. I started to think about what, if anything, I could do to try to cushion myself from the current (and future) economic turmoil…

lilwallet“I’d rather keep working in the hope of getting paid than stop working and know I’m not going to get paid.” These words, from a friend of mine who’s not getting paid by the company she’s freelancing for — the only project she has right now — might shock you if you’re on a nice steady cashflow. But if your income isn’t so stable, you might be able to relate to her sense of desperation.

Though I know no one’s immune from a recession, this conversation made me think about my own approach to the financial side of what I do. I started to think about what, if anything, I could do to try to cushion myself from the current (and future) economic turmoil. Here’s what I came up with.

1. I need a savings buffer.

Much of my work is short contract jobs, so I need to make sure I have enough money in the bank. I’ve seen a lot of talk about having a buffer that would last three months if you were out of work. That will be difficult to achieve, but it’s worth aiming for.

2. I need to pay my debts down, if not off.

Sometimes my credit card can get a hammering, so I’ve decided to pay it off every couple of weeks at the moment. This helps me avoid the “how-on-earth-did-I-spend-that-much” moments of truth that can occur if I leave it longer, and makes it easier to track my spending.

3. I need to track my spending.

I find it hard to save money if I don’t know where it’s all going, but I also find it nearly impossible to stick to a budget. I’ve taken to using my budget as a rough template for my spending, and simply tracking my spending against it. This approach allows for the variability of expenses from week to week and month to month, but also lets me work out where my money’s going, and find areas where I could be more frugal.

The budget’s invaluable on a day-to-day basis, but it’ll also help me make decisions if I’m asked to discount my rates or change my pricing structure.

4. I need strategies for finding new work.

I’ve been thinking that perhaps my wait-for-it-to-come-to-me approach to work won’t cut it if I’m out of work this time around. I’ve brainstormed a few ideas for finding work in markets that seem to be doing OK despite the downturn, and started networking with providers of complementary services that seem to be winning work right now.

Since I’ve done this, I’m also finding I’m more alert to potential opportunities and ideas that crop up as I go about my days, and I’ve started to keep a list of these so I don’t lose track of them.

5. I need to stay motivated.

With the constant news of unemployment statistics, redundancies and so on, it’s all too easy to get caught up in the doom and gloom. So rather than worrying, I’m trying to stay focused on the jobs I have coming up, and to feel reassured by my budgeting and any inroads I can make on my savings plan. When all else fails, I tell myself it won’t last forever — and I’m doing everything I can to stay in the game.

What are your tactics for keeping the wolf from the door?

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By Georgina Laidlaw

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  1. Good advice, and prepare ahead of time.

    I’ve been receiving half pay and no pay for 6 months, and it’s getting very tiring and strained, yet working 50-60 hours. I’m a salaried employee of an agency.

  2. I think it’s also important to make sure that your clients will pay the invoice on time. If necessary, offer them 5% or maybe 10% discount voucher for the next job order if they pay before due date of the invoice.

    CMIIW, but it’s about the importance of a steady cash flow for web workers to survive.

  3. Fill Revenue Gaps With Alternative Income Streams Wednesday, May 13, 2009

    [...] isn’t a new topic on WebWorkerDaily. Georgina recently wrote a great post with some of her recession avoidance techniques: saving more, managing debt and spending, strategies for finding new work and staying motivated, [...]

  4. remote access software Wednesday, July 8, 2009

    This is great advice, if you have any income coming in at all. But it’s true, keeping a working relationship w/ a company even if you’re not getting paid, is a good idea – it keeps your resume current and earns you a lot of points for when the company recovers.

  5. I agree whole-heartedly with you on number 2. I also see myself often saying how did I spend all this money. By being able to track your credit card expenses, I feel you have a greater grasp of your cash flow. Times are tough now, and I like many am cutting back on certain disposable income items.

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