A Guide to Managing Money For Freelancers

There are a lot of benefits of working as a freelancer from home; it is one of the most flexible jobs in the world. As long as the work gets done and the deadlines are met, then it doesn’t matter when or where. But those benefits do come with a price as you have to keep a close eye on your cash flow. Because there is no such thing as a set payday, and payments are made as and when (sometimes up to six weeks after work has been completed). So keeping a close eye on your finances is really important in order to stop getting into a spiral of debt.

There is also a lack of benefits because you don’t have a set employer. No such thing as vacation pay or sick pay (unless it is a long-term sickness then the government can step in) and maternity pay is going to be statutory if anything. So being on top of your finances is a must as a freelancer, so that you have enough to pay your bills, but also have enough to allow some time off from time to time. So with all of that in mind, here are some tips to help you be in better control of your finances if you are a freelancer.

Track Monthly Income

Of course, working as a freelancer can mean getting a variety of income each month. Some months are going to be busier than others, which is quite normal in most businesses. But you need to check what your ‘base’ pay is each month. If you don’t know the precise figure for what you are getting paid month by month, then it can lead to debt as you will have some set payments to make like your bills and rent or mortgage.

Don’t Forget Taxes

When you work for yourself, you are the one that is going to be responsible for paying your taxes. It can be a stress if it is not dealt with as the year goes on. So each month (or when you’ve agreed each payment with a client), make sure that you are working out the tax owed and then putting it into a savings account for when the tax return is due. After a whole year of earning it can be a lot of money up front, and if you’ve not budgeted for it, it could mean needing a quick cash advance online when the bill is due. So make sure that you budget, save, and allow for taxes at the end of each month or when you receive payments.


Being able to cover yourself when you’re self-employed is another really important step. For things like medical care, as well as insuring yourself for the work that you do, is going to help your finances in the long term, especially if something untoward happens like being sued for the work that you’ve done perhaps. So allow the cost of insurance into your monthly budget (it is a business expense after all).

Keep Checking Rates

Being able to charge a good rate for your work is important, but over time, this will naturally need to change according to the market. Look what others are charging for what you do, and make sure that you are setting a competitive rate accordingly. There is no need to undersell yourself in order to get the work, as it can mean that you often have too much going on to do as good of a job as you would like. So charge a little more, take on less work, and it will give you a better work and life balance, as well as make sure that you are more than making enough to pay your bills.

Monitor Payments

Because clients will pay at various times, some straight away, and some after thirty days or so, you will get payments in at all different times in the month. So checking your finances regularly is a good place to start, as well as having something like a spreadsheet set up to mark down who owes what and what date an invoice was sent. Then you can quickly check that against your bank statement so you know if and when you need to chase up certain clients. Sometimes things like invoices can just get mislaid or forgotten when you’ve simply emailed it over to someone. So make sure that you are checking what is owed to you, as the client is unlikely to pay unless chased, unfortunately.

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