A guide to man­ag­ing your fi­nances as a UAE free­lancer

Pay­ing bills can be a chal­lenge for those on an un­pre­dictable in­come,

The National - News - - BUSINESS MONEY & MARKETS - writes Ann Marie McQueen

The UAE is the fourthbest coun­try in the world to free­lance in, ac­cord­ing to a re­cent study by the UK busi­ness site Ex­pert Mar­ket.

It ranked af­ter Hong Kong, the United States and South Korea on a list of 57 coun­tries, based on a scale weigh­ing the cost of liv­ing, cost of start­ing a busi­ness, in­come tax rates, ac­cess to credit, av­er­age in­ter­net speed, trans­port net­works, how widely free Wi-Fi was avail­able and the cost of a cof­fee.

De­spite the ad­van­tages, there is a real chal­lenge free­lancers face – how to bal­ance their per­sonal fi­nances with an un­pre­dictable in­come.

Steve Cronin, the founder of Dead­Sim­pleSav­ing.com, which helps res­i­dents in­vest their money sen­si­bly, says free­lancers have to adopt an ap­proach of man­ag­ing their own one-per­son busi­ness know­ing there is al­ways a risk that peo­ple won’t pay or that you won’t charge prop­erly for your time. “As a free­lancer you hope­fully don’t have high work-re­lated ex­penses, but you most likely have lumpy or un­pre­dictable sources of in­come,” he says.

“You have to man­age your cash flow to make sure you can pay large ex­penses like rent.”

He rec­om­mends free­lancers get fa­mil­iar with Excel to track cur­rent and pro­jected in­come and ex­penses, both for work and home. He also ad­vises hav­ing at least three to six months’ worth of to­tal ex­penses – in­clud­ing rent – in a bank ac­count as an emer­gency buf­fer and try­ing to de­velop small, reg­u­lar sources of in­come to off­set the times you are wait­ing for payments from larger projects.

Once a suf­fi­cient sav­ings buf­fer has been reached, he ad­vises in­vest­ing the rest, mak­ing sure the money is ac­ces­si­ble in an emer­gency. Long-term sav­ings plans are not ad­vised, and free­lancers need to be care­ful about ty­ing their money up in

prop­erty, too, he says. Here, three free­lancers in the UAE re­veal how they man­age their money:

Toni Malt, 41, a free­lance make-up artist from Ger­many work­ing in Dubai

When Ms Malt set up 10 years ago, she used to worry if too

many days went by with­out work. These days, with ex­pe­ri­ence hav­ing shown that a big job is just around the cor­ner, she has learnt to re­lax.

“As a free­lancer, the rates are quite high,” she says. “And once you hit a multi-day ad­ver­tis­ing job, you’re fine.”

Ms Malt takes an un­struc­tured ap­proach to bud­get­ing, bills

and sav­ing: any ex­tra money flows into the next month, her bills are al­ways paid and she’s not on a mis­sion to save, se­cure in the knowl­edge she has sav­ings in Ger­many to fall back on.

With two dogs and nine res­cue cats, her big­gest vari­able is vet­eri­nary bills. Some months, she has spent Dh30,000 on her pets.

“Once a year I’ll do a bud­get, just to make sure I un­der­stand what I’m ac­tu­ally spend­ing monthly, like dog food, vet vis­its and salaries for maids,” she says. “But dur­ing the year I don’t re­ally watch out for it that much, be­cause it al­ways works out. I never get to a point where I run out of money.”

Ms Malt, who is open­ing her own make-up artistry school next month – Toni Malt Acad­emy in Al Quoz – still faces the same late pay­ment is­sues all free­lancers do.

“Once you are in and you are rolling there’s al­ways go­ing to be money com­ing in some­where,” she ex­plains. “But then you might have some out­stand­ing jobs that haven’t been paid for six to nine months.”

Paul Emous, 34, a free­lance pho­tog­ra­pher from the Nether­lands work­ing in Dubai

Mr Emous says the first thing he did when he de­cided to work for him­self nine

years ago was cre­ate an Excel spread­sheet and look at all his planned costs – hous­ing fees twice a year, visa, busi­ness li­cence, health in­sur­ance, trans­porta­tion, util­i­ties – as well as any un­planned, such as car re­pairs. He then im­ple­mented a buf­fer, which he con­sid­ers one of the most im­por­tant tools for a free­lancer hav­ing to cope with the ebb and flow of work.

“You need to plan a cou­ple of months in ad­vance and ad­just the buf­fer for slower months and planned ex­penses,” he says.

Sav­ing in the busy months for the slower times, and es­tab­lish­ing a re­serve for un­ex­pected costs and late or ab­sent payments – the scourge of free­lancers ev­ery­where – is key to rid­ing out the un­cer­tainty of not hav­ing a reg­u­lar pay cheque.

Mr Emous, who es­tab­lished his own com­pany, Mouse Me­dia, and now em­ploys three free­lancers, tends to in­vest in new tech­nol­ogy when­ever pos­si­ble as a way to build his busi­ness and of­fer ex­ist­ing clients the best ser­vice. He is prone to giv­ing dis­counts as an in­cen­tive for clients to pay within the month, which helps him to han­dle big­ger jobs with more up­front costs.

Mr Emous does try to plan for the fu­ture, with an eye to in­vest­ing in prop­erty in Europe, but he has ex­pen­sive hob­bies, such as div­ing, cave ex­plor­ing, quad bik­ing, sky­div­ing and trav­el­ling, which eat into his in­come.

“Of course the fu­ture is im­por­tant, trust me. I have a girl­friend, we’re re­ally se­ri­ous and we are plan­ning for the fu­ture,” he says. “But at the same time, peo­ple for­get that they live to­day and God for­bid if you get hit by a bus, can you say that you were happy with the stuff that you did?”

Eve­lyn Hester-Wyne, 38, a free­lance di­rec­tor/pro­ducer from Ire­land work­ing in Dubai

Af­ter six years in Dubai di­rect­ing and pro­duc­ing – she re­cently made a one-hour doc­u­men­tary about Global Vil­lage for Nat Geo – Ms Hester-Wyne has learned that to func­tion as a free­lancer means be­ing very or­gan­ised and also very flex­i­ble. The or­gan­i­sa­tion comes in mak­ing sure the busi­ness she formed with her em­cee/con­tent pro­ducer hus­band Hisham Wyne is fully com­pli­ant with UAE laws – in­clud­ing the VAT in­tro­duced this year – while the flex­i­bil­ity in­volves be­ing able to cope when payments are late rolling in. “You fall be­hind of course,” she says.

“So you need to be­have as a saver who’s paid monthly when in fact you are a free­lancer who is not paid monthly.”

Ms Hester-Wyne al­ter­nates be­tween be­ing hired to head up projects or be­ing asked to join a team.

That means she some­times bor­rows money to fill gaps in be­ing paid, or has large sums in her bank ac­count that have al­ready been al­lo­cated to debts and other needs.

“She de­tests hav­ing to keep other free­lancers wait­ing be­cause she hasn’t been paid for the job she hired them for.

“It’s bad enough wait­ing for payments for my­self,” she says. The cou­ple have twins, four-year-old Bernadette and Edith, so school fees are an on­go­ing con­cern.

“Be­lieve me, there are many nights where I sit bolt up­right and say ‘how are we go­ing to get those school fees paid?’,” she says.

The cou­ple, who have hired a book­keeper to make sure that they are on top of their VAT re­quire­ments and their files are in or­der, haven’t taken a real va­ca­tion since their chil­dren were born.

Ms Hester-Wyne is adamant about not pay­ing full price for their staycations or en­ter­tain­ment, ei­ther, seek­ing out what­ever vouch­ers and twofor-one deals she can find.

“I would never do any­thing un­less it has a voucher,” she says.

“I ab­so­lutely refuse to pay full price for any­thing, es­pe­cially be­cause there are so many good deals around.”

Pawan Singh / The Na­tional; Toni Malt

Di­rec­tor/pro­ducer Eve­lyn Hester-Wyne and her hus­band Hisham Wyne, left, and make-up artist Toni Malt, above, have had to adapt to the chal­lenges of free­lanc­ing

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.