What Do Freelancers Do With Extra Money?

Remote freelancing has seen a lot of new life lately.

It’s an area that’s grown in popularity over the last few years thanks to changing technology and has left many freelancers with the idea of what to do with money they earn from their business.

What Do Freelancers Do With Extra Money?

[T]he impact of the COVID-19 pandemic has caused freelancing to see an even greater (and faster) boom.

As a result, the impact of the COVID-19 pandemic has caused freelancing to see an even greater (and faster) boom.

In 2020, 59 million people were doing freelance work in the U.S.

It’s estimated that even more people will work from home by the years end.

Most people recognize the benefits of freelancing immediately.

You get to be your own boss, set your own hours, and you can work pretty much anywhere. Some freelancers even use that remote freedom to travel and work at the same time, living a nomadic lifestyle while making a living.

Another major benefit is that you can have extra money you get freelancing if you change some habits and take advantage of programs that can help you out.

Instead of taking home a steady paycheque, with your freelance work, you can charge more and make more as a way to have more money than what you made at a traditional job.

Whether you’re new to the gig economy or you’ve been a freelancer for a while and want to save more money, consider some of the following tips and ideas.

What to Do With Money From Freelancing

Here are three ways on what to do with money from your freelancing efforts.

  1. With a Tax Write-Off – Take advantage of tax deductions specific to freelancers
  2. With living in a new place – Save even more money with your extra funds by moving to a low-cost city and explore new living areas
  3. With extra help – Use government programs that can help your freelance business keep afloat during tough times

The extra savings you generate can be put towards helping you grow as a freelancer or just helping you improve your quality of life.

1. A Four-Legged Tax Write-Off

When you’re a freelancer, you’re essentially running your own small business. Because of that, you can benefit from a variety of tax deductions, including:

  • Self-employment tax
  • Home office
  • Internet and phone bills
  • Vehicle use
  • Meals
  • Health insurance premiums
  • Travel

If you’ve been working as your own boss for any length of time, you probably knew about at least some of these deductions.

But, did you know you might be able to write off your pet under certain circumstances?

Working at home means you’ll be around your pet more, which can be beneficial to your mental health.

If you have a mental or physical health condition, and your pet is used as a therapy or emotional support animal, you might be able to use that as a write-off.

The expenses you could list include everything from their food to whatever it takes to maintain their well-being.

One of the easiest ways to find out if your pet can be used as a write-off is to talk to a tax professional in your area.

You can also write off continuing education to help enhance or improve your freelance business. The work-related education means you can write off tuition, travel, or the cost of taking a class to learn a new skill related to your work.

You could end up getting more back in your refund this year if your cat or dog gets involved!

2. Living Somewhere New

Moving can be stressful and expensive.

But, when you’re a freelancer you can choose to plant roots wherever you’d like when deciding what to do with money you earn.

Moving to a low-cost living area, especially from a major city, can end up saving you thousands on things like rent, utilities, and even gasoline and food.

Of course, it’s not a decision to take lightly. If you’re considering relocating, ask yourself some of the following questions:

  • Will you be moving on your own?
  • Will you know anyone in your new location?
  • Would moving cause other members of your family to have to quit their job?
  • How much time do you need to get a new home?
  • Will it create a lot of stress?

As a bonus, some moving expenses can be tax-deductible, so keep track of travel costs if you decided to relocate.

While the upfront costs can feel overwhelming, at first, you’ll quickly start to save money once you get settled in.

If you love your new work environment and community, that will only serve to confirm you made the right choice.

3. Find the Help You Need

There’s no question that the COVID-19 pandemic hit small businesses hard.

Again, being a freelancer makes you your own business.

Thankfully, because of the negative impact of the pandemic, you can take advantage of assistance programs like any other small business.

There are both state and federal government programs specifically designed to help freelancers through these hard times.

With variants running rampant across the world, it’s clear that we’re not out of the woods yet when it comes to the pandemic.

Consider doing your research on available programs and grants that might be available.

The unrest in the world has brought more attention to freelancers to get the same rights as small businesses. So, now is a perfect time to reach out for help and take hold of the relief programs offered to you.

You can use the money right away to keep your business afloat or save it away to grow your endeavors later.

As a freelancer, you’ll go through times of “feast and famine,” so having a bit of money saved up is always a good idea in case your client list is small.

There’s something empowering about being your own boss and running your own private business. No matter what you do as a freelancer, it’s a fantastic way to save money on some everyday expenses and take advantage of unique ways to save money.

Keep these ideas in mind if you’re considering becoming a freelancer, or start saving in ways that you never have before if you’ve been in the gig economy for years.

Beau Peters is a creative professional with a lifetime of experience in service and care. As a manager, he's learned a slew of tricks of the trade that he enjoys sharing with others who have the same passion and dedication that he brings to his work.

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