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Empower Your Freelance Career with These Finance Tools and Tips

March 22, 2024


If you’re a freelancer, you probably know full well what the benefits of this lifestyle are. You can work from a café in Paris or the comfort of your bed if that’s what you want, and set your own working hours, all while being in control over every aspect of your professional career.

However, unlike a normal job where you can get yourself a steady paycheck every month, a freelancer’s income can sometimes be a lucky packet; you never know what you’re going to get. In the one month, you could earn the big bucks, whereas the next you may be scrambling to make ends meet. Below, we will tackle the bull by the horns and get down to the nitty-gritty of managing and thriving financially as a freelancer and exactly what it takes to get there.

Managing Your Money

One of the hardest things about being a freelancer is taking care of yourself money-wise. The fact of the matter is that working from gig to gig can be pretty volatile sometimes, and the first step is coming to terms with the nature of irregular income. Unlike a regular salary, your earnings can vary dramatically from month to month based on the number of projects you secure, their size, and the payment terms.

Budgeting with Fluctuating Earnings

Budgeting with a fluctuating income might feel downright impossible sometimes, but it’s entirely doable with a bit of creativity. The goal is to establish a baseline budget based on your minimum monthly income. How do you do that? Put your math hat on, calculate your average earnings over the last 12 months, and use this figure as a rough estimate for planning your expenses.

From here, divide your expenses into two categories. The first category is fixed, like rent, insurance, and a car payment. The other one is variables, like eating out or your entertainment budget. Then you must prioritize covering your fixed expenses first so you know the essentials are always taken care of. For months when you earn more than average, resist the temptation to splurge and instead allocate the extra funds towards savings or paying off debt.

Setting Money Aside for Emergencies

You’ve probably heard before how important it is to have some money set aside for rainy days, but it’s just not always as easy as it sounds. For freelancers, it’s also a buffer for when work is scarce, and you still need to cover all your expenses comfortably.

Step one is to save enough to cover at least three to six months of living expenses. This might sound like a tall order, especially when starting out, but even small, regular contributions can add up over time. If you’re wondering how to get started, then go ahead and set aside a percentage of your income every month as soon as you get paid so you don’t have time to spend it on something else.

Tools for Taking Care of Your Finances

Skip the drama and let the tech of today help you out with taking your money management to the next level. You have more than a few tools to choose from that can make the whole process a breeze and get you on the right track. Whether you need help with budgeting, tax management, or investments, there’s an app for that.

Review of Top Financial Apps 

  • Mint: Mint helps you track your spending and is one of the most popular budgeting apps. It can also categorize expenses and set budgets, which is pretty great for getting a full view of your finances in one place.
  • QuickBooks Self-Employed: This software helps you track expenses and mileage, and manage invoices, alongside tax calculation and deduction identification.
  • TurboTax: Doing your taxes can be a bit of a head-scratcher, to say the least. TurboTax simplifies the process by guiding you through each step and ensuring you capitalize on any deductions and credits. The self-employed version is especially handy for freelancers.

Diversifying Income Streams

Ever heard the saying, “Don’t put all your eggs in one basket”? Well, that’s like relying on only one source of income because should anything have to happen with that single stream, you’d be left with a lot of worry and no money. Diversifying your income isn’t just about financial stability but about seizing the opportunity to grow and explore new avenues without the constant worry of falling off the rope.

Not Relying on a Single Income Source

One thing you can do as a freelancer that many people with office jobs simply don’t have time for is to have various income streams. You could work as many freelance jobs at the same time as you want, with each of them bringing in a steady stream of cash. Not only would you be doing well for yourself money-wise, but you’d also be saving yourself a lot of stress should one or two dry up.

Ideas for Diversifying Your Income 

There is genuinely no limit when it comes to what you can do to branch out and make your money from a few different places. You could branch out into other areas of your niche, like if you’re a copywriter, then going for technical or long from content writing could be an option. Or you could go for something entirely different, like graphic designing, if you have the skills and experience. Another option is to take what you know and offer it to the world by creating eBooks and selling them online. 

Building a Financial Support Network

As fun and freeing working as a freelancer can be, it can also feel a bit lonely sometimes. Except for the fact that you’re working solo the whole time, you also have to handle every aspect of it yourself, from quality control to finances. However, building a financial support network can take away that lonesomeness and give you a pillow to fall back on when you need it most.

Professional Networks and Communities

Professional circles and groups are what make up your support system. Not only do these people open doors to new job opportunities, but they also share knowledge and experience from past mistakes and lessons learned.

Platforms like LinkedIn and local meetup groups allow freelancers to connect with others who have navigated similar financial challenges and come out the other side. These connections are super important and go far beyond merely helping you manage your finances—they can even be a guiding light on days when you’re struggling to stay motivated and remind you of what you’re bringing to the table.

Final Thoughts

Freelancing means you’re in charge of how much money you make, and while some months can rake in some big cash, others might not be that lucky. That’s why you need to ensure you always have a steady flow of funds, no matter what. The tools we’ve covered are also a crucial piece of the puzzle and play a big role in how comfortable you are during the dry months when the work isn’t as abundant.

By leveraging professional networks, seeking out specialized advice, and embracing collaboration, freelancers can not only survive but thrive, turning their individual ventures into a collective journey toward financial empowerment and success.

The essence of freelancing is not just in the work itself but in the broader adventure of creating a sustainable, satisfying career on your own terms. By adopting a strategic approach to finances, leveraging the community for support, and continuously seeking out new opportunities for growth, freelancers can ensure that this adventure is not only profitable but also profoundly rewarding.