Finance

We had a talk where we were introduced to finance as a freelancer. Even though I don't have an interest in being a freelancer I still found the talk very useful. We covered things like spending and budgeting.

Working as a freelancer, earnings can be unpredictable. Taking note of money spent per month can help set a monthly budget.

There are 3 types of freelancers

-PAYE

-Sole Trader

-LTD

PAYE stands for Pay As You Earn. These types of freelancers are employed and they are being paid through a pay role.

Sole Trader is self-employed. They have lots of clients and set their own work hours and rates.

LTD are people who work from a company structure.

If a person is earning £12,500 there is no tax

Next is £37,500 which is taxed at 20%

Over £50,000 is taxed at 40%

Anything over is taxed at 45%

There are 2 types of National insurance

-Class 2, if you earn £6,725 you need to pay £3.15 a week.

-Class 4, need to pay 9% of your profit for earning over £9,500

If a client hasn't paid then you can use a late payment legislation.

Budgeting sheet - after graduation

After I graduate I plan to continue living with my mom for about a year. This is my budget sheet for the year after I graduate.

Budgeting sheet - 2-3 years after graduation

After 2 years I plan to move out with friends. This is my budgeting sheet for 2-3 years in the future.

Savings Schemes

Short Term

For the next few months, the only thing that I can think of saving money for is if my equipment were to suddenly break. This will include things like:

-Laptop

-Tablet

-Cintiq

Rough Cost - £1,400

Medium Term

After I graduate I'll need to save money for normal necessities and possibly software if it were not provided by the company I work for:

-Food

-Clothes

-Software

-Other Equipment

Rough Cost - £1,526

Long term

After 2 to 3 years I plan to move out of my house and live with friends, so I'll be independent with my earnings and spending.

-Rent

-Software

-Equipment

-Vacation

Rough Cost - £3,550

Salary/Pay Rates

I looked into Animator salaries in the UK.

Specifically I looked at juniour positions in companies that I am intersted in.

Based on this research I found that if I were a sole trader my pay role would be about £120. This is considering if I worked 8 hours per day as a character animator.