As a concept, freelancing is nothing new; freelancers worked for Don Draper and Co.
But thanks to the ubiquity of WiFi and also the many different tools that facilitate digital communication, freelancing will soon become the largest portion of the labor force.
And it’s easy to see why this trend is occurring. The benefits of freelancing, such as the ability to work whenever and wherever you want, have made this an attractive option.
But once you start freelancing, you’ll quickly realize that it’s not all fun and games. You’ll be responsible for things that you previously never really worried about, such as health insurance and office space.
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And while which health insurance you choose will depend on many different things, such as where you live and what type of coverage you need, home office expenses are the same for most people.
Yet many freelancers are spending more than they need to on their home office, which cuts into their profit margins and reduces their earning potential.
So to help you make the most of your freelancing career, consider making the following cuts to your home office expenses.
1. Choose the right orientation
It might seem like a small thing, but where you choose to put your office inside your home can actually have a big impact on how much you need to spend to maintain it.
This is because each room in our house is a bit different. Some get more sunlight than others, and some are draftier, making them harder to heat and cool.
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Also think about which room in your house gets the most natural light. This will allow you to rely less on artificial lighting, which both saves you money and also improves your productivity.
But if you live in an area with a warm climate, then you might want to choose a room that does not get too much direct sunlight, as this can cause it to get uncomfortably warm.
These savings can add up quite a bit over time, helping you to reduce the expense of running a business out of your home, which puts more money in your pocket.
2. Use free services or demos
To work as a freelancer, we rely on many different services, ranging from communication apps such as Slack, to word processing software such as Microsoft Word.
And in today’s highly developed economy, you can bet there will be a paid version of nearly everything you use that offers higher functionality or premium service.
In some cases, these promises will be true. But if you’re trying to keep expenses down, then don’t fall for this.
Stick to free services whenever you can, and if you really think the paid version will be better, consider doing a demo first to see if it is really going to deliver what you want.
If you must pay, get on the phone and do some negotiating. Businesses list a price on their site, but that doesn’t mean you need to pay it.
Some hard bargaining can result in real savings, which will help make your life as a freelancer more lucrative.
3. Switch ISPs
You need internet to be a freelancer, obviously. But as we all know, internet isn’t cheap. However, things are changing.
More competition in the market has helped bring prices down and raise the level of service offered to consumers. Do a search of broadband providers in your area to see if you could be saving.
But another thing to look for is if you’re getting more than you need.
ISPs will try to sell you on the idea that you always need the fastest internet connection, but unless you’re streaming extremely high-quality (4k) videos, or in need of super high-quality video conferencing, you probably don’t need hundreds of Mbps (megabites per second).
Instead, you can get away with 30-40 Mbps, which will be much cheaper and just as effective.
Many cable companies will offer cable internet as part of a bundle, but be weary of this. Cable providers put you on the same network as others in your neighborhood, which allows them to advertise much higher speeds than they could ever deliver.
It might be better to get fiber optic or DSL internet, as these give you a dedicated line that will ensure a fast, reliable connection at all time.
4. Buy used equipment
Between office chairs, desks, computers, microphones, headphones, laptops, and so on, it can be expensive to stock your home office. Consider going after used or refurbished equipment to help you save some money.
For example, many of the top laptop manufacturers offer refurbished equipment that is as good as new but around half the price.
They come with full warranties, and they are often a better buy since someone has already tried them out, discovered an issue and had them fixed.
Used office equipment can be found pretty much anywhere, but consider Facebook marketplace, Craigslist, or your own personal circle of friends and family. You never know where you might find a great deal!
5. Make it your primary place of business
For years, people who maintained a home office in the United States could deduct the cost of it on their taxes. The only requirements were that it be only an office, meaning you couldn’t sit at your kitchen table and declare that was your home office.
However, with the recent tax reform bill, this changed. Now, you can only deduct your home office from your taxes if it’s your primary place of business, meaning it’s where you work most or all of the time.
As a result, if you want to take advantage of this, then consider giving up any other office spaces you might hold, even at your local coworking space.
You’ll almost certainly end up saving more paying per day and declaring your home office as a tax deduction.
Be mindful of your spending
When working from a home office, it’s easy to blur the line between what is a business expense and what is a personal expense.
So just make sure that once you step foot into your office you put on your business cap. Don’t spend excessively or order that cool gadget you don’t need.
Keep your eyes peeled for deals and bargains. This will help keep overheads low, making your work as a freelancer that much more profitable.
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