BONUS: Take Charge of Your Finances | Deliberate Freelancer with Pamela Capalad
Today’s guest is Pamela Capalad, a certified financial planner and accredited financial counselor in Brooklyn. Pam created this really cool program called Brunch & Budget, which helps people who feel ashamed or embarrassed about money have a safe and friendly place to talk about their finances—over brunch with Pam. I think this is genius. It makes people more comfortable and really open up to Pam, whose mission is to make financial planning as affordable as possible for the communities who need it most.
We didn’t get into it in this episode, but Pam and her husband teach hip hop and finance workshops to kids, teens and college students across the country through a program called Pockets Change. They also host the Brunch & Budget podcast, where they discuss how personal finance and racial economic justice intersect. And—if that’s not enough—they started a financial planning program designed for the needs of people of color called See Change.
In this episode, learn how Pam went from working in wealth management to financial planning—first, for her friends. A conversation with a friend led to Pam’s business, Brunch & Budget. While the first meeting is usually an in-person brunch, Pam then meets with clients virtually every month to help them put together a financial plan and to actually implement it.
Pam goes over the most-asked questions she gets from freelancers, which includes issues related to quarterly taxes and an inconsistent income.
Pam also helps freelancers figure out how to raise their rates.
Pam gives us the scoop on new IRS rules that benefit freelancers—the IRS won’t be charging penalties if you didn’t pay your 2018 taxes on time every quarter. And going forward, they’re going to less strict about freelancers paying taxes every quarter as long as you get all the taxes paid by January.
Pam explains why it’s important to build a good relationship with an accountant who works with freelancers.
Pam is a big believer in creating a 12-month cash flow projection of how much money you anticipate you will make and what your income goals are. It’s important to have monthly, quarterly and annual goals, partly because a freelancer’s income can be inconsistent. That cash flow projection will help you notice income patterns as income ebbs and flows throughout the year. Then, you can plan your action steps around your income goals and track and measure whether you’re hitting your income goals.
She also encourages freelancers to take a VACATION when the months are low.
Pam talks about how imposter syndrome relates to money—and sometimes increases as you get more successful.
When you are setting your rates, you need to figure out how to take the emotion out of it. Pam admits undervaluing herself when she first started providing her financial planning services.
But then Pam took the emotion out of creating her rates by making herself stick to a rule that every time she gained two or three new clients, she had to raise her rates for all future clients. She also recommends coming up with the “least I’m willing to take” rate.
If you do take a project below your rate, consider what non-monetary things you can negotiate with the client—a referral, a longer contract, additional projects.
Pam helps us figure out how to commit to a savings account. She recommends a “high-yield” savings account so you can gain a bit more interest than what you would at your local bank. Know what your minimum personal expenses and your minimum business expenses are each month. That way when you exceed those, a chunk of that money can go directly into your savings account.
Make sure you have a separate savings account just for taxes. That money is not yours. Set aside 25–30 percent of whatever you make and pretend that money doesn’t exist.
From there, take your monthly inc
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