Insurance Blog – Looking for insurance for freelancers? First, learn the following
Are you a freelancer? According to the website Investopedia, a freelancer is someone who earns money from project-based work or any task, usually for a short period of time. Freelancers are also called independent workers because they are not employees of a specific company, so they have the freedom to perform different jobs for multiple clients at the same time, unless the individual Exclusive to have a contract until a project is identified. completed.
During the pandemic, we saw rampant layoffs (PHKs) through the mass media as companies had to survive financial shocks due to reduced revenue. People affected by layoffs look to freelancers as an option to get on with their lives. On the other hand, workers who are used to working from home (WFH)
As a result of movement restrictions and social distancing, they also turn to independent ways of working. They see the positive benefits of creating a work-life balance. Many workers also choose freelancers so that they can work in fields that match their interest (ranjana).
By becoming a freelancer, one has the freedom to work anytime, anywhere, as long as the work or project is done correctly and on time. Not surprisingly, in 2020, at the start of the Covid-19 pandemic, the Central Statistics Agency (BPS) recorded a 26% increase in the number of freelancers or freelancers. As of August 2020, 33.34 million people were working as freelancers, an increase of 4.32 million people compared to the previous year. So, are you one of them?
For those of you who have just graduated or already have work experience, freelancing is actually a career choice as a result of technological advancements. The internet makes it easier for people to communicate and get work done. We also know that many freelance jobs are related to the information technology (IT) sector. Web developers, Android developers, code programmers, and content writers are examples of jobs that are outsourced to many freelancers. The audio-visual content industry is also growing rapidly, so the need for illustrators, graphic designers, videographers, video editors, music arrangers and even talents such as actors is also increasing.
Freelance style financial management
However, being a freelancer is not all about freedom and passion. Unlike office jobs in companies, freelancers have aspects of uncertainty. The main one is uncertainty about income. There are times when a freelancer has a lot of clients and earns a lot of money, there are also times when a freelancer doesn’t have a job so he has to survive only on the capital he has already earned. Even in the health aspect, freelancers have to bear all the bills themselves in case of illness or even hospitalization. Therefore, freelancers must be able to manage their finances.
Preeta Hapsari Goji, a financial planner, explains five things freelancers can do to manage their finances:
1. Determining the budget (budget) based on the salary goal of each month
In fact, there is no fixed income in the freelancer dictionary, but you can manage the uncertainty of income by setting a monthly salary goal. Method? The target monthly salary figure is obtained from the total of all the monthly expenses that you will definitely spend. Preeta said it is a living fund. List the expenses that you definitely have to pay each month, such as rent, electricity, tolls, etc. The amount of the livelihood fund is 50% of the target monthly salary. Then add 30% for storage and 20% for gaming. Preeta said being a freelancer doesn’t mean you can’t enjoy life. Play is money used to go on vacation or buy something fun with regards to entertainment. So, for example, your living expenses are 10 million rupees, then your monthly salary is 20 million dollars. So, you can consider how much work you have to do and how much income you earn from each project or job so that you can earn a monthly salary of 20 million rupees every month.
2. Prepare your emergency and protection budget
According to Pritchard, an emergency fund is the most important fund a freelancer should have. The amount is 12 times the cost of living. If your living expenses are 10 million rupees, that means your emergency fund is 120 million rupees. Emergency funds can only be used in emergencies
When life funds are running out. Freelancer emergencies usually happen when jobs are scarce, almost all clients experience late payment of invoices or other unexpected expenses. If income stabilizes, the used emergency fund must be replaced to maintain a fixed amount of 12 x cost of living. In addition, self-protection is in the form of health insurance. We’ll discuss that in more detail in a moment.
3. Be careful when applying for a (installment) loan
If you’re a freelancer, don’t take installments, Preeta advises. Higher installments are suitable for office workers who always receive monthly salary. However, when you have to return something, make sure that it is not a consumable item, but something that is useful for running your business smoothly. Make sure that the maximum installment value is 20% of the average income you receive every month. Pay the installments as soon as possible so that you do not incur any arrears or interest.
4. Set aside funds to invest in preparation for retirement funds
Administrative staff are usually included in the BPJS or DPLK (Financial Institution Pension Fund) employment program. As a freelancer, you are solely responsible for providing a living fund in retirement. According to Preeta, 10% of your income should go directly to mutual funds. Freelancers earning less than 100 million rupees per month can invest in mutual funds. If your income increases, you can invest in stocks, precious metals, etc.
5. Consider having multiple separate accounts
Preeta recommends you have four types of accounts. The goal is that the funds are not mixed and easy to manage. What four accounts? Let’s see below:
- Customer Payment Account: A special account for paying invoices from your customers.
- Live account: An account to consider “monthly salary” from the first account. The contents of the living account are used to pay monthly and daily living expenses.
- Savings Account: An account for saving, preparing emergency funds and investing.
- Spending accounts: Accounts for vacations, going to concerts, buying entertainment equipment, etc.
Importance of insurance for Freelancers
As by Financial planner Preeta Hapsari Gojie, Insurance is one of the most important aspects of financial planning. as a Freelancers, you must have the ability to manage risk, especially the uncertainties we mentioned above. Don’t get frustrated with confused, aka erratic income, and don’t get into financial trouble. You should have the means to protect yourself in the form of insurance.
health insurance Self-protection is basic that you should have as FreelancersAfter all, you are working with and for yourself, which means you need to maintain your health so that you can continue to work and earn money. If you get sick, who will bear the cost but yourself? When you are hospitalized, who will replace you to earn money?
With health insurance, you have financial support. In case of illness and hospitalization, the insurance company will compensate the expenses according to the contract of the insurance policy you have. You do not need to empty your emergency fund or withdraw funds aliveFund saving or even the budget PlayingYou.
You just need to set aside a budget to pay your health insurance premiums. You can put this payment fund in the fee alive. To pay the health insurance premium, Preeta recommends paying it annually, given the uncertainty of your monthly income. Freelancers. Preeta also suggested that you have at least BPJS Health. If you still have the funds, you can get additional health insurance to supplement your financial support.
Rojai Indonesia has a hospital cash plan insurance with daily cash benefit that does not depend on hospital charges, but according to your policy. You can also submit a claim even if your hospital expenses are covered by another insurance, you know! This insurance can also replace the lost income due to hospitalization. Very suitable for Freelancers.