How to Expertly Manage Your Money as a Freelancer

Estimated reading time: 2 mins

A freelance career can be unpredictable. After all, your income will depend on your clients’ needs and it might seem almost impossible to calculate your finances from month to month.

However, there are actions you can perform to take a tighter grip of your finances, which can help you to enjoy a healthy bank balance and avoid debt.

To reach your financial goals with ease, read the below advice on how to expertly manage your money as a freelancer.

Calculate Your Potential Income

The first step you must take is to create two columns on a blank piece of paper. The first column should list your regular clients and the sum you expect to receive.

On the second column, you should estimate how much money you can expect to receive from any one-off clients, and you should then halve this amount before adding it into the first column.

It could help you to create a realistic estimate of the amount you can expect to receive that month. Any extra you make will be a bonus.

Identify Your Expenses

Next, you must calculate your expenses to ensure you can pay every bill in full and on-schedule.

It is, however, important to separate your personal expenses, such as food, rent and utilities, from your business costs, such as insurance, office equipment and taxes.

It might, therefore, be worthwhile setting up separate bank accounts to prevent confusion and help you to accurately estimate and repay your tax.

A Financial Backup Plan

While freelancing allows you to become your own boss, it also means you could face financial uncertainty from time to time.

After all, clients could suddenly cancel a project or cut your workflow, which can dramatically impact your monthly income.

For this reason, you should have a financial backup in place to ensure you can pay your bills on time.

For example, you could secure a quick loan from, so you won’t miss an important bill, such as a mortgage repayment.

Develop a Healthy Savings Fund

Every freelancer should aim to develop a healthy savings fund, which they can turn to if a client misses a repayment or they don’t reach their expected income.

If possible, aim to set a fixed amount of money aside each month, which will provide a financial buffer should the worst happen.

Save Your Taxes

The last thing you will want to receive is a penalty for failing to pay your tax in full and on time.

In addition to setting money aside into a savings fund, you also should open a separate account to save approximately 30% of your income towards your tax each month, which can take some of the financial pressure off your shoulders once tax season arrives.

Regularly Review Your Budget

It is wise to get into the habit of routinely checking both your cash flow and budget, which will ensure you never spend more money than you earn.

A budget should detail the date a bill is expected to leave your bank account, so you can reshuffle your finances to ensure you don’t experience unwanted debt.


About the author /

Simon is a creative and passionate business leader dedicated to having fun in the pursuit of high performance and personal development. He is co-founder of Applied Change, a Business Change consultancy based in the UK. Simon is also an Ambassador for Gloucestershire business. Simon is an Associate Member of the Chartered Institute of Professional Development.

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