How To Budget as a Freelancer (2024)

One of the scariest aspects of freelancing is irregular income. Although I was financially prepared to leave my full-time job, lack of income is my number one fear as a freelancer.

Things seem like they are going well. I have clients and am hustling hard.

Because I’m no longer receiving a steady paycheck, I’ve had to really start figuring how toplan for irregular income.

Visualize your income

Write down your income you are expecting for the month. I use my Simplified Planner, my favorite pens in the worldand fun washi tape to literally tape outwhen I can expect my invoices to be paid. The visual aid is so helpful and I can see when my income is due in a snap.

(here’s an example of how use my calendar to plan paydays)

Budget bills in advance

Aside from a visual aid, I also use a spreadsheet so I know my fixed bills months ahead of time. I budget for necessary expenses, like wine groceries, pet food, and oil changes. Being prepared has been a lifesaver. I like being able to look at any given month and know what my expenses will be, how much I will need, etc.

Have a plan for your paycheck

When you receive a paycheck, immediately split it up into different bank accounts. IuseCapital One 360 and have a handful of different bank accounts.

How To Budget as a Freelancer (3)Ilovethis account because it’s all online, there are ATM’s everywhere and it’s free. Originally Capital One 360 was my backup account, but now I use it full time.

Here’s what I have been doing every time it’s payday:

  • 30% goes to my savings account labeled taxes
  • 10% goes into my savings account labeled savings
  • 50% goes into my checking account
  • 10% goes into miscellaneous accounts

This seemslike a lot of accounts, but I’m trying to put my money towardsspecific things. If extra money sits in my checking account there’s a good chance I will spend it.

My fun spending money is coming from a couple different areas that aren’t all related to my pay checks. I’m still mystery shopping, doing panel studies and surveys. The side hustlingnever ends!

Start saving, even if it’s only a few dollars a week

Whether you want to start an emergency fund or a vacation fund, you have to start setting some money aside. If you’re like most people and struggle with saving, you should consider using Digit.

I’ve just started using this freeprogram and love it. Digit lets you save money each week from your checking account. What I really like about Digit is that it analyzes my bank account and determines how much I can really save per week. Someweeks it might be $5 and other times it might be $20. You don’t have to worry about overdraft and can contribute less or more if you need to.

As of now, I don’t know an easier way to save money!You can learn more about Digit here.

Nix the extra spending

Just say no to going out to dinner and all the extra things you want to be buy at Target. It’s not easy, but eliminate the fluff in the beginning.

If you’re struggling to change your lifestyle, consider mystery shopping. I love mystery shopping because I get paid and reimbursed to go out to dinner, groceries, ordering a pizza in and shopping at big box stores. You might also want to consider panel studies, which you can learn about here.

If you have to spend money or if you are at the grocery store, make sure are at least making money from shopping. I prefer to use:

  • Rakuten (you literally get paid cash back when you shop online and get it deposited into your PayPal account. Free money – I’ve made almost $700!)
  • Ibottais another free cell phone app. You use it after you go grocery shopping and use your receipt. It’s basically a rebate app, so you can earn anywhere from 50 cents to $5 off everything you buy.My favorite part about this app is that it’s not always brand specific, like a lot of coupons are. So you’ll be able to scan “any brand of bread” for 50 cents off, etc. If you do coupon – you can STILL use Ibotta and get a rebate. For the diehard couponers out there, this will often result in getting an item for FREE. Crazy, right?If you want to grab the Ibotta app and start making money off your grocery receipts, clickhereto get started. You will receive a cash bonus of $10 when you scan your first item!
  • Shopkick (you get “kicks” just walking into stores which you can exchange for $5, $10 and $25 gift cards to place like Target – I’ve made almost $150!)

Expand your sources of income

Even if you have regular freelance clients, keep hustling. Seek outnew clients, find new job boards and be open to trying new career paths. If a client asks you to expand your contract and cover new areas, why not try it? This could open new job opportunities that you might not have considered previously.

You can start with survey apps for a few extra dollars here and there. My favorite apps are My Soap Box and Survey Junkie, but there are so many different survey companies that you can choose from.

Joining various Facebook group boards and reaching out to other bloggers has been a great way to make new contacts.

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Seek out local side hustles. My new apartment building has a ton of dogs. I’ve decided to start up my dog walking and pet sitting business again after getting approval from my property manager. I put up a sign in our community’s dog park letting people know I work from home and amreadily available. This has already resulted in a couple clients!

If pet care isn’t an option,look online at Craigslist for gigs or your local college job board.At most colleges, you can find graduate students using grant money to conduct research studies. Many times this grant money turns into compensation for people willing to participate in studies.

Related reading:

  • 37+ Legit Ways You Can Side Hustle Right Now
  • How I Made Over $4,500 From Side Hustles
  • 25 Ways to Earn Extra Income
  • How to Make Money Pouring Alcohol
  • How to Make Money Donating Plasma
  • The 5 Best Money Making Tips

Bottom Line

Prior to quitting my job, I was financially prepared to start freelancing. Even with money tucked away, I don’t want to spend it. Instead, I’m using the five tips above so I canbudget as a freelancer.

Do you worry about irregular income?

How To Budget as a Freelancer (2024)

FAQs

How To Budget as a Freelancer? ›

Track monthly expenses

To maintain your lifestyle while self-employed, your business profit must cover all your personal expenses. Otherwise, you'll go into debt. If you don't already have a personal budget, list each of your basic monthly expenses, including food, rent, utilities, debt payments, etc.

How to budget when you are a freelancer? ›

Track monthly expenses

To maintain your lifestyle while self-employed, your business profit must cover all your personal expenses. Otherwise, you'll go into debt. If you don't already have a personal budget, list each of your basic monthly expenses, including food, rent, utilities, debt payments, etc.

How much should I put away for taxes as a freelancer? ›

That's why we recommend setting aside around 25–30% of every freelance check you receive in a separate savings account to cover both your income taxes and self-employment taxes. That way, you won't get blindsided by a huge tax bill once tax season rolls around.

How to budget when you are self-employed? ›

How to manage your finances when you're self-employed
  1. Separate your business and personal bank accounts. ...
  2. Pay yourself a salary. ...
  3. Automate your budget. ...
  4. Don't forget your emergency fund. ...
  5. Plan for retirement. ...
  6. Keep investing. ...
  7. You're responsible for Social Security and Medicare. ...
  8. Pay quarterly taxes.
Jan 12, 2024

How do I pay myself as a freelancer? ›

To pay yourself as a sole proprietor, all you have to do is transfer money from your business account to your personal bank account. It's super easy. Better yet, set up ongoing bank transfers between your business account to personal account so you never forget to pay yourself.

What is the 80 20 rule for freelancers? ›

The 80/20 rule is also called the Pareto principle, and it means that roughly 80 percent of the effects of anything you do come from 20 percent of the causes. So, 80 percent of your sales are likely generated by about 20 percent of the services you offer.

Can you write off expenses as a freelancer? ›

The good news: Being a freelancer allows you to claim most of the same deductions as a larger business. In general, you can deduct the costs of running your business. The IRS deems a business expense deductible if it's both ordinary and necessary.

What is a good income for self-employed? ›

Self Employed Salary
Annual SalaryMonthly Pay
Top Earners$37,000$3,083
75th Percentile$36,000$3,000
Average$32,315$2,692
25th Percentile$30,000$2,500

How do I pay myself if I'm self-employed? ›

You can pay yourself as a business owner by setting a regular salary or taking owner's draws. Maintain clear financial separation between personal and business accounts, and choose an amount that aligns with your business's financial health.

How much money should I save for taxes if I'm self-employed? ›

Nevertheless, independent contractors are usually responsible for paying the Self-Employment Tax and income tax. With that in mind, it's best practice to save about 25–30% of your self-employed income to pay for taxes. And, remember, the more deductions you find, the less you'll have to pay.

Do freelancers count as self-employed? ›

The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax.

How do I price myself as a freelancer? ›

How to price yourself as a freelancer
  1. Research freelance rates. Research common freelance rates in your area. ...
  2. Consider your expenses. ...
  3. Factor in taxes. ...
  4. Review the project scope. ...
  5. Assess the client. ...
  6. Consider the value you provide. ...
  7. Choose a method. ...
  8. Determine your availability for work.
Feb 3, 2023

How do I ensure I get paid as a freelancer? ›

3 Tips for Getting Paid Faster for Freelance Work
  1. Create clear payment terms. Before you send your first invoice, make sure everyone involved is clear about what to expect. ...
  2. Keep tabs on your invoices. ...
  3. Make it easy for clients to pay.
Apr 10, 2024

How do you have people pay you as a freelancer? ›

Let's look at some of the best methods to collect payments from clients for freelance work.
  1. Online payment software. ...
  2. Accounting or invoicing software. ...
  3. Freelance platforms. ...
  4. Bank automated clearing house transfer. ...
  5. Physical check. ...
  6. Fees. ...
  7. Payment methods and currencies accepted. ...
  8. Security.
Mar 11, 2024

How do I report income as a freelancer? ›

To file your annual income tax return, you will need to use Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship), to report any income or loss from a business you operated or profession you practiced as a sole proprietor, or gig work performed.

How do freelancers track income and expenses? ›

What are the best ways to track expenses as a freelancer?
  1. Choose a suitable accounting method.
  2. Use a dedicated business account.
  3. Categorize your expenses.
  4. Keep your receipts. Be the first to add your personal experience.
  5. Use a software or app.
  6. Review and adjust your expenses. ...
  7. Here's what else to consider.
Dec 8, 2023

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