Budgeting as a Freelancer


If you think budgeting with a traditional 9-5 is hard, imagine keeping track of multiple forms of income as a Freelancer. These numbers tend to fluctuate depending on how you fare per month, which can make the thought of formulating a budget a somewhat dark one which can lead to you dreading the very task. Although freelancing comes with many perks such as time flexibility, one thing it isn’t married to is financial stability. Not a shock to many, but when it comes to the topic of money, freelancers look upon it with wary eyes as each month has the possibility to lay them on their back financially. So how does one do it? How does one begin to budget as a Freelancer? Let’s get into some tips.


Know the source of your money


Whether it’s from OnlyFans, Digital Marketing or the life of a Mixologist; where your money comes from each month is very important. With this money, you can chart your financial journey going forward, which will let you know the different things your money can be dedicated to. Let’s say you’ve been in business for about 2 years and you’re interested in starting a budget. To get a general idea of the amount you make on a monthly basis given the nature of your job, you can calculate the unknown figure by taking the total amount you earned over the past year and dividing it by 12. With the unpredictability of work, your income may vary from month to month, but this gives you the average you’ve earned each month so you have a baseline number to use for your monthly income when budgeting. On the other hand, if you’ve been working for a shorter time, say four months, you can do the same calculation but just divide by four. If you’re just starting out and don’t have much payment history, try to base your expectations on your current rates and how much work is available.


Your money, know where it is going 


You need to know your expenses. It’s important that you know what you’re spending on.

From the sum of your expenses, you’d easily know if the amount you make per month can cover all monthly expenses (such as rent or mortgage, utilities, loans, groceries).  You’ll also know if you’ve got room for other costs such as discretionary spending (entertainment, dining out) and if you can throw anything at savings. Goals, whether short or long term, should also be assigned a slot in the budget. I say this because people tend to lean into budgeting hard and neglect putting anything aside for their goals. More often than not, at the end of budget season, people realize that because they were so fixed on sticking to the budget that saving for important personal goals took the back burner and they’re not any closer to being able to afford the downpayment for that new car. 


Monitor your money


You have to be on it. Think conscious spending under the theme of “every dollar has a job”.  As a freelancer, the unpredictability of work is something that you can’t shake, at least not totally.  A hack to survive as a Freelancer is to prepare for those periods of slow work and low income. For instance, the month or months on end where money wasn’t flowing as easily as previous months where hypothetically you were pulling $15K per month, then the following month it dropped drastically to almost $6K and the months that follow the amount juggled between almost $7K and scraping $4K. Experienced here is a gross drop in numbers, which, for any Freelancer can be caused by a myriad of reasons ranging from work going on pause due to sickness, equipment being lost or a flooded apartment where everything was lost. Trust me, the list of possibilities is endless. To float yourself during the low earning months, it is suggested that in the higher earning months you steer clear as best you can of overspending. So when budgeting, it’s best to get to know exactly which part of your life each dollar contributes to (rent, bills, savings) and knowing precisely when your money is scheduled to reach you as it plays an important role when it comes to sticking to and constructing a budget. 


Get you a safety net, build an emergency fund 


Considered a rule of thumb, building an emergency fund takes a while but trust me, the sun won’t shine every day. Creating a financial umbrella which you can stand under when unexpected showers of expense beats down on you tends to exude a sense of security in its owner. Knowing in the back of your mind that if something out of your control happens you’ll be able to financially shoulder it as a Freelancer, is a goal and highly encouraged. An emergency fund should have a figure reflecting at least four to six months of expenses which includes rent or mortgage, groceries, cooking and transportation, gas, electricity, internet and other bills. It may take months and even years to achieve your emergency fund but once you get it to where you want it,  as a general rule: when you tap into it, just be sure to top it back up.   


Plan. Review. Execute. Review. Plan. Review. Exe- You get it!


When embarking on such a journey projected at making your future self proud, it doesn’t hurt to review, adjust, add and subtract as many times as you need to along the way.  Whether that is adding to the savings slot, subtracting subscriptions from your total expenses or just dumping one of your monthly earnings into your emergency fund; planning, reviewing and executing the budget will help pave the way to financial stability. 


As a freelancer myself, I’ve found these tips very practical. When it comes to the down periods or months with a grossly lesser income figure, once all projects are tallied (and triple tallied), I was very thankful for drawing up a budget.  Though difficult at first, especially when it came to the Emergency Fund, although easier typed than done, discipline and “the vision” in my opinion actually played quite well with each other. Also, as a Freelancer, the perks are great but the unpredictability with which work will either flow your way or not is always a gamble. To combat this, I and folks worldwide, suggest getting into budgeting. The sun won’t shine every day and in my opinion, you’d have a much better time if you had yourself an umbrella. 


Leave a Reply

Your email address will not be published. Required fields are marked *


Play Video