4 “Off the Beaten Track” Tips to Create Financial Security as an Independent Professional

Every worker has at least some degree of concern about job security, and independent professionals are very concerned. The challenge cited most frequently by nearly half of the respondents (49%) to our 2023 State of Independence survey was insufficient predictable income. Coming in second, 33% of respondents were worried about the state of their project pipeline.

For an independent, job security is synonymous with financial security—having enough work to cover business expenses, taxes, and personal expenses on an ongoing basis. They must drum up work, ensure they get paid, and keep on marketing to uncover new opportunities. They also need to plan for normal downturns (like the common end-of-year business slowdown) and unexpected dips in business.

Off the Beaten Track Tips for Creating Financial Security

Well-known strategies for pursuing financial security include creating a business plan, working with a legal and tax advisor, and keeping a budget. Here are some lesser-known tips that can help create financial security even in tough times.

Cover Yourself

Key person insurance is a type of business insurance that pays out if the insured person—business owner or corporate executive—passes away or becomes disabled. Though this insurance may not be feasible for your business, you can self-insure to some degree. First, stay healthy through good nutrition, exercise, and sufficient rest and time away from the business. This will help make sure that you are in good condition to spend the time and energy needed to generate income and grow your company. Second, consider personal disability insurance. This type of insurance has similar features as the group disability coverage offered by employers. Like key person insurance, it will guarantee money flow if you are disabled.

Periodically Review Recurring Costs

In addition to reviewing your expenses in general, make a point of reviewing what you’re spending on recurring costs like app subscriptions, online memberships, and streaming services. These expenses can sneak up, and even in small amounts they can add up to a significant sum. Check your bank account and credit card statements to figure out what you’re spending. Decide if each expense is needed and cancel any that aren’t.

Keep Weekly Track of Cash Flow

In addition to your budget, keep track of cash flow on a weekly basis. Enter recurring costs from your budget on a simple spreadsheet and enter the amounts in the calendar weeks they occur. Subtotal these, and then enter your expected income based on your accounts receivable and generate a net total by week. This “picture” will give you insight into your cash flow and easily show spots where you may have negative cash flow—in time to make corrections.

Build an Emergency Fund

Though not so much an off the beaten track tip, it’s worth mentioning. Saving money to cover emergencies may take quite a bit of discipline, especially when times are temporarily tight. Find a reasonably liquid destination for your money (like a certificate of deposit), one that is difficult to access on the spur of the moment but that can be tapped in real need. Decide what your goal total saving should be based on your anticipated needs, then calculate the amount in your monthly budget to send to that destination, preferably automatically. Your discipline will pay off if an emergency hits and you know you have the money to weather it.