Money Talks Podcast: Managing your finances as a freelancer

Here’s an excerpt from the podcast: 

Andrea Heng: 
So I wanted to talk about what you mentioned earlier a couple of times – the salary. And I know it’s important to pay myself, but how do I define this, especially when … some days we’re earning $1000, some months we’re earning $30,000. And yes, while we should be planning with a year’s salary in mind, how do we actually pay ourselves monthly then as a salary when that income generated is inconsistent. How do we tackle this?
 
Chuin Ting Weber: 
I think that the main reality you need to face is, how good are you as a freelancer? And how much income can you actually generate? And it’s actually a mindset that is not to do with the income side but to do with the expense side. If you spend, say, $25,000 a year on your basic expenses, you should be able to generate income of $50,000. I’m not even talking about CPF. If you can’t achieve that, you’re going to be very stressed … So that means that if you really think that in one year, you’re going to have $50,000, and you should have a good sense of that, then you should not be spending more than, let’s say $2,000 a month. And if you can’t do that, then perhaps you should delay your entry into this space.