Financial growth and increment is mandatory more especially in the times we are live in. Where the cost of living is constantly rising. Inflation has us on a choke hold. Here are some tips to help you increase your income and how to manage your newly found wealth. Supercharge you life and join our waitlist so that you can be the first person the have your very own mahala Glow app account. The glow app helps you to send, receive and save money with peace of mind.
Charge Per Project (And Not Per Hour)
There are two main ways freelancers set prices. You can charge your clients an hourly rate or a flat rate per project. So which one should you choose? Each method has advantages and disadvantages, depending on the nature of the work and the relationship with the client. Let`s take a closer look at each option.
Charge per hour Billing the client by the hour means giving the client an hourly rate in advance, which the client can agree to in advance. There are several reasons for choosing this method. Advantages of time charging Your salary is directly proportional to the work you do. Simply put, charge it every hour and you'll get back what you put in. This is a great strategy if you're working with a new client or working on a project that may scale or stall over multiple iterations.
Charge per project Pricing per project means agreeing on a fixed price for the entire scope of work before the project starts. This is beneficial for both you and your client as you have a clear idea of what to expect and how much to budget for. Advantages of project charging Working fast is not rewarded. As mentioned in the previous section, some jobs get faster the more they complete. When you charge a flat rate, you don't risk losing revenue opportunities just because you're efficient. You can avoid surprises and don't have to keep track of time
What Is Tax Planning?
Simply put, tax planning is managing your finances and economic affairs by minimizing your tax liability by taking legitimate advantage of all legal and regulatory deductions, exemptions, benefits, and rebates.
Advantages of tax planning
Participating in tax planning can help you minimize your tax liability by determining deductible and depreciation limits. Considering your tax plan is essential to making informed decisions about your business. Effective execution of the business plan plays a pivotal role in achieving profit targets.
Business tax planning involves inventorying assets and estimating tax liability in good time before payment is due. Saving cash ensures the time value of tax savings and the immediacy of profits.
Salary vs. Hourly wages
Understanding the difference between a salary and hourly wages can help you to find a way to increase you income.
Salaried workers are paid a fixed amount regardless of the hours they work, so they are paid whether they work or not. And while you don't get extra money to cover overtime, you often save overtime hours.
Hourly workers are paid only for the number of hours worked. They received extra money to supplement their overtime pay, giving them the opportunity to earn more throughout the year. It is also important to have realistic expectation and you have to understand the type of industry you are in.
How to calculate salary increment percentage?
First, you need to know your current salary. Second, you should know what the cost of living in South Africa is. Finally, we need to compare the two numbers to see the rate of increase.
For example, if you currently earn a salary of R10,000 and your cost of living in South Africa is R8,000, your salary will increase by 25%. It's important to remember that these numbers are estimates only. Your actual salary increase may be higher or lower depending on many factors, including: the company you work for, your experience, and the current economic climate.
In some cases your salary increment may be too high, and you can be wondering what to do with the extra income here are some tips to help you manage your newly found riches.
How to handle new or increased income
In the beginning you can get very excited when you see so much money in your bank account. If you don't pay attention to the following you might end up overspending
Being able to manage your money well is more than just trying to achieve your goals. You also don't have to have a lot of experience or be a math genius to be good at financial management.
The challenge is finding ways to pay off debt, cover basic living expenses, and save a portion of your paycheck while working toward your financial goals.
So if you're looking for advice on how to manage your payroll, you've come to the right place. I put on my thinking hat to help you accumulate and create wealth with your hard earned salary.
Make A Budget
Budgeting helps you manage your money and track your spending. You need to set a realistic budget for yourself and prioritize paying bills, EMIs, and other fixed costs.
Spend 50% of your income on your most important bills, 30% on financial goals, and 20% on flexible spending.
Set financial goals
Create a framework for what you want to achieve, rather than investing your money tirelessly and potentially jeopardizing your goals.
Invest in Options That Work For you
Talk to a Cube Wealth Coach to identify investment options based on your financial goals. Investments should align with future financial goals. It's important to do your research to find the one that best fits your goals. Alternatively, you can consult your financial advisor for professional advice based on your situation.
Be Careful How Much You Spend
It's easy to keep spending money on depreciable assets, gifts, and wishes...but these costs end up being much more than you might believe.
For every R1000 you spends on gifts and depreciation, R10 should be saved. That small amount of money will save you money in the long run.
Treat Yourself In The Most Smart Way Possible
It's easy to be hard on yourself by cutting back on what brings you joy. This can cause you to eventually give in to pressure and splurge unnecessarily. So when budgeting, it's important to leave room for things you want to stay on track.
Reward yourself with fancy dinners and vacations when you reach your financial goals!
Pay Off Debt
High-interest debt such as mortgages and credit cards can wreak havoc on your personal finances. Once you start generating a steady stream of income, you should consider cashing in as soon as possible. Vacations would be a lot more fun if they were paid for and you didn't have any credit card debt!
You Can Achieve Your Financial Goals By Making Saving a Necessity
Including savings in your budget and making it a necessity can help in so may ways. Setting short-, medium- and long-term financial goals is an important step to financial security. Unless you're working on something specific, you may end up spending more than you need to. You will run out of money when you retire, let alone when you need it for unexpected bills.
You can get stuck in a vicious cycle of credit card debt, feel like you don't have enough money to properly insure yourself, and become more vulnerable than you need to face the biggest risks of your life. If you invest in your future now you will have the confidence and boost you need to achieve the bigger goals that take more time.
You have now seen and you understand what it takes to increase your income more especially if you are a freelancer. You questions around tax and tax planning has been explained. The difference between a salary and wages have been explained. You also understand the key feature it take to calculate you salary increment. The steps of how to better manage your money have been given. Lastly, importance of saving has been highlighted.