10 essential financial planning tips for newlyweds
Explore essential financial planning tips for helping clients merge finances in marriage
Key Takeaways:
The freelance economy is booming, with more people than ever choosing the autonomy of self-employment over traditional 9-to-5 jobs.1 According to the Statista Research Department, it’s projected that by 2027, 86.5 million people will be freelancing in the United States and will make up 50.9% of the total U.S. workforce.2 This seismic shift in the workforce presents both opportunities and challenges, not only for freelancers, but also for financial professionals who must adapt their advice to meet the unique needs of clients with irregular income streams. In this blog, we’ll explore strategies you can use as a financial professional to help guide your freelance clients toward more stable and secure financial footing.
Freelancers and gig workers often face unpredictable income flows, making it challenging to adhere to conventional financial planning and budgeting advice. Without a fixed monthly paycheck, financial planning becomes a more complex puzzle to solve. These budgeting tips can help your clients ensure they have what they need to cover their expenses.
Freelance and gig workers typically don’t have taxes withheld from their paychecks, which can lead to tax-time surprises. You can encourage your clients to file quarterly tax estimates and payments to avoid year-end shocks. Working with a certified tax professional can be crucial to strategize the best way to tackle taxes when self-employed.
Traditional employer-sponsored retirement plans aren’t typically an option for freelancers. Instead, these clients will need to pursue other options to build wealth and invest in their future. Some options include:
Lack of employer-provided health insurance for the self-employed can be a significant downside to freelance or gig work. There are a few options for people who aren’t provided employer-sponsored health insurance.
Freelancers benefit from more frequent financial check-ins compared to traditional employees due to their variable income streams. It could help client retention to offer a service tailored to their needs, like regular check-ins. Use the opportunity to educate freelancers about cash flow management, investment opportunities, and the tax implications of their business expenses. This information empowers them to make informed decisions.
Financial professionals eager to accommodate the emerging freelance clientele must be willing to innovate and personalize their services. By understanding the nuances of freelancing finances, you offer a tremendous value to your clients. This sets you apart and establishes you as their go-to expert in navigating the waters of irregular income. Remember, your role as an advisor to freelancers is not only to impart wisdom but also to instill confidence. Empower them with the tools and strategies for financial stability and watch as they thrive in the gig economy.
Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.
This information is general in nature and is not intended to be tax, legal or other professional advice. Federal income tax laws are complex and subject to change. The information presented here is based on current interpretations of the law and is not guaranteed.
Nationwide and its representatives do not give legal or tax advice. An attorney or tax advisor should be consulted for answers to specific questions.
NFM-23751AO