Money Lessons as a Freelancer

THIS IS NOT! I REPEAT NOT FINANCIAL ADVICE! Just my personal experience managing my own finances as a freelancer! (I'm taking my RFP now so maybe next time I can actually give proper financial advise ????)

If there is 3 things I learned about money is that

If a problem can be solved by money, it's not really a problem

You will definitely spend more as you earn more!

Creating a system is essential, you will NOT have the same discipline when it comes to money

As a freelancer, you are in charge or everything from operation, marketing and all the way to finance. And for us some months can pay very well but some months not so much… So, quick and simple, here is how I break down my personal finances as a freelancer which actually anyone who is just starting out in their career can replicate.

Although I earn varying amounts every month, I pay myself a set amount every single month for 2 main reasons (I was told paying myself is not considered an expense if you are a sole prop so that's not one of the reason)

• So I don't spend beyond my means
• I can easily plan out my investments as well as spending (a changing amount every month is going to be a pain to plan)

Most people would recommend the 50/30/20 rule and mine is pretty much the same 65/25/10

65% is spent on things like rent, food and utilities as well as my insurance which is a need. Here are some things that I’m willing to disclose is that I’m currently paying close to RM500 per month as a 25 year old covering Life, Critical Illness as well as my Medical Card with abit of investment bundled in together (If you are an insurance agent wanting to do a financial review, I'm just gonna ask you to read my newsletter ??). But if you are interested in details and would like to have a discussion and non-selling chat I'm always down for a meet, just drop me a DM!

What my insurance covers

Great Eastern

Life: RM200,000 // Critical Illness: RM200,000 + A small chunk for investment

AIA

Medical Card: RM1.5mil annual limit // Personal Accident: RM500,000

Investments

I do already have existing funds which I invest into on a one off basis, but here I'm going to share with you funds which I contribute to on a monthly basis.

For investments, every month I allocate 25% to my EPF and StashAway with my additional cash just saved up in Versa just case there is a good investment opportunity that comes along. (Or if you spontaneously decide to disappear to Bali at the end of the year, I decided to use this extra money in Versa to treat myself last year) ?

Here is the returns as well as the fruit of my hard work Dollar Cost Averaging small contributions into the S&P 500 for the last 1.5 years

If you are wondering I’m using StashAway as? a way to invest in the S&P 500 ETF because of its set and forget feature which allows me to just automate the contribution at the start of the month. As of now the portfolio is up 21% and if you are interested you may use my code below to sign up for StashAway!?

Have you started investing with StashAway yet? Sign up with my link and we'll both get up to RM30,000 managed for free for 6 months! https://www.stashaway.my/referrals/lime6b

Why do I contribute to EPF? Well EPF not only has pretty decent returns relatively risk free, I consider it my retirement fund as well as a way to reduce my tax as EPF allows me to deduct away my contributions! Pay yourself before you pay your government LEGALLY!

Lastly my emergency or opportunity cash is in Versa which also I’ll link below for you to get FREE RM10 when you register. Versa has one of the highest flexible rates at 4% and one of the best app interfaces out there. Their managed accounts are no slouch too generating more than 10% returns for 2023 so it’s definitely one you wanna check out.? https://download.versa.com.my/1bAf/referral?deep_link_value=WRR8FXMV

Food and Eating Out

A majority of the spending close to 25% is spent on Food as that is the literally my biggest spending as I LOVE coffee and cafes and that’s my budget every month.?What is the point of earning money if you can't enjoy it on the things that you love?

I'm not saying you should get your latte or your brunch and spend RM50 eating out every single meal, but I'm saying it's okay to spend on going to places you like to eat once in a while! We live in Malaysia and eating is our national past time, embrace it and allocate part of your budget to enjoying the good things in life!

Travelling

Lastly, for my 10% want which is my Travelling fund! That one I use StashAway Simple too to automate my contributions and the method of set and forget has really worked wonders for me last year as I have been able to achieve most of my financial goals easily.

If you travel frequently you might want to allocate more to this. However, most of my travels are covered by the people I work for which I extend a couple of days for my own leisure purposes so that actually allows me to save a lot on flight and accommodations.

Additional Tip from my friends - Get a credit card that allow you to get travel perks and you can greatly improve on your travel experiences with lounge and also bonus points which you can exchange for luxury stays or free flights. I'm personally looking into maximising this too which I'll probably talk on next time.

Learning how to manage your personal finances is something not taught in our schools and we literally have no idea what to do with it when we graduate. Yes I have been scammed, lost money and also overspent my budget.

If you read to this part, I would like to hear about some other ways that you set up your personal finance management system or even as wealth planners feel free to reach out to me on DM I would like to understand more how different people plan their finances!

Till the next newsletter! Cheers!

?? If you have learned something from this, drop a like!

?? If there is something I can improve on, drop a comment!