The most important tool to give you control in client relationships
It's (probably) not what you think
Hi Friend,
Today we’re going to talk about the number one thing you can have that gives you control in your client relationships.
That’s right, I know it sounds very click-baity and very sensational, but there is actually something you can have that gives you leverage when dealing with your clients.
And it’s not what you’re thinking.
It’s not an amazing writing ability.
It’s not hundreds of awards under your belt.
It’s not the self-confidence of a climber who has summited Everest.
It’s not a take-no-crap philosophy.
It’s not great shoes and a party attitude.
Yes all those things help (okay, maybe not the shoes or the party attitude).
The one thing that can give you control in your client relationships is…
Drumroll…
…an emergency savings account with at least one month of expenses in it.
If that felt anti-climactic, stay with me while I explain.
Because an emergency savings account is not only incredibly empowering it’s also within your control. It’s something you can start building up today and it can completely reframe how you view your client relationships. You don’t have to go to school again or take more courses or win awards to build up your savings.
You can start saving even if you only put $10 a month aside for now.
Most people think of an emergency savings account as being a safety net if the worst were to happen—in case they can’t find any clients to work with, their most lucrative clients leave them, or they become ill and can’t work for a few months.
Or, you know, a pandemic hits and all their clients vanish (yes, that happened to me).
That’s all true. A savings account covers you in all those scenarios.
But a savings account also means you can decline to work with potential clients you don’t fit with. You can fire clients who are too demanding or unreasonable.
Having money in the bank means you can walk away and if you can walk away, you can start standing up for yourself. You can start saying no.
Think about it.
If you don’t have money in the bank, every potential client you meet is the one you need so you can pay the bills for another month. You go into each interaction with potential clients praying they work with you because you’ve got rent (or a mortgage) to pay and a car that needs gas.
You’ll promise the moon so they say yes. You’ll put up with terrible demands on your time and energy because you have to. The minute you say no, you’re scrambling to cover your financial obligations.
So you never say no.
If you have an emergency savings account, you’ve got at least one month of bills covered. You’re less desperate. You’re more empowered to question whether the client in front of you really is a good fit. You’re better able to say no to the things you don’t want to do, and hold out for the things you do.
It took me a long time to realize the power of an emergency savings account. I focused my energy on paying off debt (also important), not realizing that money in the bank would give me the freedom I needed to take control of client interactions.
Not only did I wind up with no money in savings, I never really got control of my debt in the way I thought I would (that’s a story for another time).
If you’re just starting out in freelancing, or don’t have an emergency savings account these are my recommendations based on what I’ve done (note that what works for me might not work for you; you need to sort your finances out according to your situation and if you require any specific financial advice, talk to a financial advisor or an accountant):
Total your essential monthly bills (the things you need to keep living and keep working). This includes housing, utilities, food, loan/credit card payments, some digital subscriptions if they’re necessary for work, and possibly your vehicle.
Open a high-interest savings account. Determine a reasonable amount of money you can set aside each month. Even if that amount is $10, get started. My account is at EQ Bank and I don’t have a debit card for that account so I can’t use the money on a whim.
Enable automatic deposits, so money is transferred from your other bank account automatically, without you thinking about it.
In particularly lucrative months, consider adding some of your extra profits to the emergency account to build it up faster.
Determine how many months of bills you need in the account to feel secure (most experts recommend between 3 and 6 months, but it truly is dependent on your personality and comfort level). Build to that. Start with a goal of one month of expenses and go from there.
Use the account for emergencies but as soon as possible build it back up again.
Go into your client and prospecting meetings with the knowledge that if this client doesn’t work out, you’ll still be okay financially, for at least a while. Use that knowledge to feel empowered to set your own terms and boundaries.
I’m comfortable with about 5 months of expenses in my savings account. I’ve managed to build up to 3.5 months, so I still have a bit of saving to do. But I also know that if I lost all my clients tomorrow I would have about three months to build my business back up before I ran out of money.
That is an incredibly freeing and empowering feeling.
Here’s to your freelance happiness,
Heidi
This is solid advice, Heidi, and I like that you acknowledge that even if you can only put away $10 per month, it's good to get started. Starting to save for an emergency fund, even when it's difficult, is an empowering move. Seeing my emergency fund build feels good, like I'm taking control of my future. It helps build the habit so when the money is flowing more I have the desire to build my emergency fund up rather than buying something I really don't need. I also looked at my priorities this year, and building my freelance editing business is my number one goal, so I cancelled my Apple Music subscription and purchased Freelancing with Heidi Turner instead. I can feel it already—it was the right decision. Thank you!