jeez is life complicated!

spaghetti_monster

Have just discovered this great website and forum and already received some great advice :j

I recently realised that I've spent so long in debt that I'd come to consider this normal. It's funny how in many areas of life I'm quite patient, practical and organised - but I guess money hasn't been one of them! (Until now!)
Anyway, reading through the threads, articles here is a real inspiration!

I was wondering if anyone is (or was) in a similar situation and has any advice about getting organised...

I'm now trying to do a budget/work out my SOA but:
I'm a freelancer (music) and do a bit of teaching. I have a few fixed jobs that are weekly (some taxed at source, some not) - the rest is random! Of course there is a bit of a pattern, but things go up and down - and this affects my spending as well.
I just realised that whenever anyone ever has asked me how much I earn I really don't know - well more or less - but never exactly! It seems to me that with this moneysaving stuff that more exact figures would be most helpful. Also that my tenuous grip on my financial reality might be a reason for being in debt!

I got a big diary (started late Jan) and have been writing down ALL spending and earning. (Still after 2 months some people haven't paid me - ahhh. the freelancers life..)

It just seems like such a big task to sort out all this information...and then would it be right in 2 months time? Maybe I just have to assume that earnings will be on the low side and use extra money to pay off the debts. (Not forgetting to save some for tax.....)

Well, I'm going to try and puzzle it all out!
Thanks again for the inspiration! :T

lynzpower

Dotty Anne has been in a similar situation, with not sure how much her business has been earning. Have a look at her threads for more info

All the best x

spaghetti_monster

thanks for that, I'll have a look!

tyllwyd

I'm freelance too, and I'd say the first thing to do is to get on top of who owes you what. They shouldn't be taking more than two months to pay you - I'd get on the phone with some polite reminders asap on Monday morning! I find that I've got a pretty good feeling for how long companies typically take to pay up, so if payments are more than a week or two over that, it is worth checking in case an invoice has got lost in the system somewhere.

My big sin is not putting aside money for tax. You have got to work out a suitable percentage and save it when the money comes in, anything else just doesn't work!!

I find that it is very easy to get caught out when basing my spending on one month's money - it so easy to feel rich one month, then have a couple of very lean months afterwards and find that all the money's been spent. Or spending too much while I'm working on a project because I know there is a big lump sum on its way - then finding that there is nothing left over by the time it arrives.

I'm not sure how to best do it - maybe base your monthy standard spend on any regular income and something like an average of the previous three months earnings. And put any extra aside in a separate account, so you can see exactly what is in there if you need to spend it.

I only wish I was actually as organised as that!

spaghetti_monster

Thanks - that's really good advice and I'm going to try my best to get organised!

The people that owe me are still within expected limits - so I'm expecting a cheque any day!
What's confusing is that of my regular jobs, 2 pay every month, 2 pay every a term - these are teaching so i do a regular session 30 weeks of the year (no holiday pay).
Every gig is different - you can get paid on the night or 2 months later!

The tax thing is very important, I agree. I used to do a bit more PAYE work and this seemed to balance out the self-assessment (nice tax rebate!). Last tax year, the balance switched, I didn't really clock this and just got stuck with a horrible tax bill this January. For which I had saved nothing. Ouch!

tyllwyd

alex_w wrote:

The people that owe me are still within expected limits - so I'm expecting a cheque any day!
What's confusing is that of my regular jobs, 2 pay every month, 2 pay every a term - these are teaching so i do a regular session 30 weeks of the year (no holiday pay).
Every gig is different - you can get paid on the night or 2 months later!

That is difficult! Have you tried coming up with some kind of a spreadsheet showing what you have earned in theory each month, and comparing that with the cash you have actually received - and also the money that you have spent out. Over a few months, that might start giving you a better feeling for how things are going.

BACKFRMTHEEDGE

You definitely need an excel spreadsheet.

kuohu

Or better still, can you get your hands on some software like Microsoft Money or Quicken? I think the basic versions of these are about £20 but they really are excellent for getting everything sorted out and projecting future cash flows. (I couldn't live without MS Money now).

spaghetti_monster

Thanks for all this advice!
I will have a look for those programs - do you know if you can get them online?
I think I could get microsoft office. (have a mac and don't have Word). Then will have to extend computer as well as budgeting skills!

tyllwyd

Don't pay out money for Microsoft office - apparently the free OpenOffice software is pretty good.

amosworks

I use OpenOffice and it's great - fully compatible with MS Office also but it's a lot better. Why pay for something you can get for free that's even better? lol