Tips On How To Manage Your Finances As A Freelancer  

One of the major things to consider as a freelancer is that you are also a business owner. Therefore, it is essential to always keep track of your finances to ensure that you can soldier through good and bad times. Here are a few tips that are guaranteed to help you stay on your toes in terms of finances.  

Take Note Of Your Income And Expenses  

The first thing you need to consider is how much you earn regularly. You can do this by creating a spreadsheet. Make a column and project the payments you get monthly from regular clients. Then make another list of your one-time clients and divide your expected income from this section into two.   

This will show you your average income for good as well as slow months. The next step is to calculate your expenses. It is crucial to know what your personal and business expenses are. This will help you to create an effective budget plan. You can do this by going through your previous financial statements to get an accurate figure.   

Create A Budget   

Budgeting helps to ensure that you do not spend money excessively. Since freelancing has its good and bad months it is key to always be prepared so you can still survive when business is slow. Creating a good budget enables you to see where you are overspending and underspending. When creating an effective budget, remember to include your expenses, investments, savings and taxes. To make it easier to do this you can try the zero-budget technique.  

The zero-budget technique is a budget style that ensures that your income and expenses are balanced out so there is nothing left over at the end of the month. It also allows you to restart a budget every month and assign categories for expenditures based on the income you receive.  

Budget For Taxes  

Benjamin Franklin once said, “In this world, nothing can be said to be certain except death and taxes.”  

Including your taxes in your budget plan is essential as it also helps you to stay on track with your income. You can get the estimate of your taxes by calculating your average tax payout for the last 6 months then make sure you set that aside in your budget.   

Allocate Yourself A Fixed Salary Amount  

As a freelancer, your income is not regular. However, it is good to pay yourself a particular salary. You can do this by having your income flow into one account and then allocating a percentage of it as your monthly salary. This salary will be able to help you in planning your finances and ensuring you have extra money to spend on yourself.   

Separate Your Business and Personal Account  

Having separate accounts also makes it easier to track how your business is doing. When you separate your personal and business account you will be able to see patterns in your freelance jobs and the income, they bring in. It will also help you in terms of saving and the strategies you need to take to ensure business growth.