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How freelancers manage money and don’t go broke

Freelancer in office manages money

Becoming a freelancer can be a great lifestyle choice. Here’s 9 ways freelancers manage money so that you can focus on your work rather than making rent for the month.


Imagine waking up anywhere in the world. Sitting under a palm tree and sipping a cocktail as you work for a few hours, then take a dip in the pool. This is the dream of freelancing. Freelancing enables you to work more flexibly and choose what you work on and who you work with. However, like any job, freelancing comes with its challenges and a big challenge for all freelancers is money.


Freelancing and money can be a struggle when clients don’t pay you on time.

This makes budgeting difficult for freelancers. Other challenges include clients haggling over your prices, having to chase up invoices and being asked to work for exposure rather than money. It’s clear that for freelancers, mastering your money is essential so that you can focus on your business rather than stressing about paying your bills.



Here are 9 money tips for freelancers to ensure you stay on top of your money:


1. Be confident in your style

  • Some people will love what you do and others will hate you for being you.
  • I get this all the time because I was born and raised in the Middle East and so don’t fit a stereotype. I’ve not got a radio job before for not sounding Australian enough and then lost out on another gig for sounding too Australian.
  • Rather than getting bitter about it, I recognise that I have a unique voice which doesn’t play to stereotypes and can engage more people from different backgrounds.
  • Realise that what makes you different is your biggest strength as it will help you stand out from the crowd and take confidence from the fact that you’re creating your own style.


2. Don’t be afraid to increase your prices over time

  • As you continue to freelance, you’ll improve your skills and gain more experience.
  • Improved skills and services mean that you can also ask to be paid more for what you do.
  • Try raising your prices if you can justify the increases for your market and see what the reaction is. Most of the time, you’ll be positively surprised.


3. Get the deposit

  • Please learn from my experience of being burned and get a deposit from your client upfront. 
  • Too many freelancers must wait months for their invoices to be paid or have to chase clients to pay an invoice. 
  • If you ask for a deposit, what you’re asking for is for a client to have faith in your ability to deliver the product or service they’re asking for. They’re also more likely to pay you the full amount, having already paid the deposit.


4. Learn to say no

  • I can’t say this clearly enough: exposure doesn’t pay the bills.
  • When you approach a freelancer or creative to work for free or for a heavily discounted price, you are saying that you don’t value what they do enough to pay for it. I don’t go to the supermarket and offer to take a selfie with my milk rather than pay for it.
  • Don’t feel bad about choosing to value your time and learn to say no to these exposure opportunities if they aren’t worth it to you. 


5. Build your emergency fund

  • Life happens. Work offers can dry up in an economic downturn, your washing machine can break down and family members can get sick unexpectedly. When life happens, what you need is to be able to access cash quickly.
  • An emergency fund is a pot of money that you can draw on when you need it. If you’re not convinced you need an emergency fund, here’s our argument for why it’s a non-negotiable.
  • I’d strongly suggest that you have at least $1,000 in your emergency fund and then aim to save 3-6 months of living expenses.
  • If you’re wondering how to build up your emergency fund, here’s 5 steps to build an emergency fund and 5 ways to make some extra spending money.


6. Learn to love tax deductions

  • In the course of your work as a freelancer, you’ll need to consider taxes.
  • The upside of this is tax deductions. Whether it’s your internet, equipment or travel expenses, it’s worth looking into what you can claim as legitimate deductions from your tax bill each year.
  • Make sure you keep the receipts and check out the guidance from your tax authority as to what deductions relate to your work and what you can and can’t claim.


7. Document everything

  • I learned early to document everything, particularly when it comes to working with clients. Putting requests in writing and getting a client to confirm what they’ve asked for makes it a whole lot easier when they ask for variations.
  • You can also go a step further and set out expectations for a project via a contract so that everyone is clear on what they’re signing up for.


8. Know where your money goes

  • This is so important but in order to budget for your expenses each month, you need to know what those expenses are.
  • Too many people don’t know where their money goes each month but for freelancers, it’s even more important so that you can then set up clear targets for your income each month.
  • If you’ve never won at budgeting before, here’s how you can budget in under 10 minutes and the best budget apps.


9. Get a month ahead of your income

  • If you can save a month’s worth of income, you can live at least one month ahead of your income.
  • This means you can spend April living off the money you originally made in March.
  • This budget technique is used by the budget app YNAB or You Need A Budget, which you can read more about here to see if it’s right for you.



Freelancing offers many of us the opportunity to live the life we want and focus on the work we love. By staying on top of your money, you can make freelancing a lifestyle option that you would choose again and again.


Read more: Find you best budget app

Written by Kate Crowhurst

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