Everything's getting more expensive, most people's income isn't rising to match, and inflation is at a 30-year high. The cost of living crisis is hitting lots of people hard, dramatically increasing their fuel, energy, food, and everyday costs. Class 1 and Class 4 National Insurance payments are also set to rise by 1.25% in April 2022.
Freelancers and the self-employed can often feel financially vulnerable, even if they have a longstanding work history and reliable clients. This is how you can deal with the cost of living crisis, protect your finances, and make the most of savings.
Review your prices and rates
When prices rise it has a knock-on effect on everyone. Small businesses are spending more on their supplies and raw materials so their prices are increasing to cover it. Freelancers like you are no different.
How appropriate are your daily and hourly rates considering this rise in inflation and the cost of living? Have you increased them as you've gained more skills and experience? Have you increased them as your costs have risen? Approach new clients with your new rates and give existing clients plenty of notice. Remember - replacing you is a really big inconvenience.
Check you're claiming tax allowances and deductions
There's a lot of tax relief out there but you often have to seek it out. If you have an accountant they'll be able to give you the best information and even claim on your behalf. If you don't, these are some of the potential tax allowances you could benefit from and apply for:
- Claim £6 a week if you work from home.
- Make sure you're recording and claiming your business expenses correctly and accurately.
- Claim your bank, overdraft and credit card charges as well as interest on business loans.
- Claim for the cost of seeing solicitors, accountants, financial advisors, and any other business specialists, as well as professional insurance policies.
You might also be entitled to marriage allowance which can be backdated and is potentially worth up to £252 a year (over 2 million of us are currently missing out on it!)
Check if you're entitled to any benefits
The self-employed can be entitled to some means-tested benefits and it's not as difficult to claim as you think. Depending on your freelance income you could be able to reduce council tax payments, access housing benefit, and reduce the cost of rapidly rising energy bills.
entitledto is an anonymous, independent calculator which will tell individuals and organisations what they could be entitled to. Four million people from all different backgrounds use the calculator every year to find out what they can claim.
Find out if you can negotiate or write-off debt
Most of us have debt but when it becomes difficult to manage it's important to do something about it. If your monthly payments are high and making it hard to save, you can seek advice from independent charities like StepChange. They'll help you understand your payments, how and where they could be reduced, and give you advice and support for negotiating with lenders. Without this advice you could be paying a lot more than you need to as well as shouldering the burden of it all on your own. Talk to someone and take the pressure off.
Make sure you get paid on time, every time
Unpaid and late invoices put an even bigger strain on your finances. Solna helps you reduce invoicing admin and make invoice payments more reliable. Automate your invoice reminders, track all your due dates on a super smart dashboard, and create smart, professional invoices from our range of templates. Start invoicing for free, FOREVER.
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