Design school may not have a course dedicated to personal finance management, but it doesn’t make it any less important for the modern designer.
Acquiring more knowledge and honing your skills are important for growth in your career, but knowing how to manage your income and budget plans are also vital to success.
Every designer (professionals in general) needs a robust money management system to develop a successful practice. And even if you are not yet self-employed, you’ll still find some of the following tips useful.
Organise your budget
Managing cashflow is always one first steps to taking control of your finance. Outline your goals at the beginning of each month or quarter. Determine what new tools you need and the expenses you’ll make. Set up a budget for your income and expenses to help monitor progress regularly.
If you are fond of putting all your expenses on credit cards, irrespective of whether you pay your bills completely at the end of the month, you could be stacking a pile of debts. Keep your credit card mainly for convenience and rewards you can get. Ensure your pay off your balance when the bill comes, and don’t keep more cards than is necessary.
Set up a convenient billing system
Some designers charge their client for certain materials they need from the onset, while others complete the project and put the extra expenses in the final bill. If you are of the latter kind, be careful of accumulating expenses a client might not be willing to pay for.
Unless you are familiar with the customer, it is advisable to disclose all your costs from the start. The design website, Designhill, has a clever way of connecting graphic designers with customers via a contest system. All financial arrangements are discussed before commencing the main project. Designhill offers the best accounting and financial logos for finance companies, finance services, bank, and investment firms.
An organised billing system allows you to have a straightforward fee arrangement with a customer. You are able to plan your budget better and avoid financial misunderstandings along the way. Where does your money go?
Where does your money go?
This is a question many people ask themselves (not designers alone). It is also a sign of an improper accounting system. Taking control of your cash flow gives you an idea of how you are spending on a daily basis. It is important to make sure you are not going higher than your income.
Furthermore, keep your recurrent monthly expenses low to save enough money over time. If you don’t blow away you funds on an expensive apartment today, you’ll have enough to buy your own house before you know it.
Start saving for the future
Preparing for retirement is something you do the moment your start working. Never put it off for “sometime in the future.” As designers, it is easy to get caught up in the web of work and everyday expenses that you miss some monthly additions. There are special money apps that will help you save at the end of the month. Whether you choose the 50/30/20 rule or your own formula is up to you.
As a tip, keep your personal account separate from your business account. Similarly, your business savings account should be used for work alone. When you have a safe nest egg, you’ll have peace of mind to carry on till retirement.