So you’re enjoying the awesome perks associated with being a freelancer — you make your own hours and are your own boss. However, the downside is that since you are independent and lack the backing of a regular company and a regular paycheck, you need to ensure that you keep your finances in check. To do so, you will need to budget, plan ahead, and make the right moves to create a financial safety net should your work dry up.
Let’s talk about six money management tips that can help you to thrive as a freelancer.
1. Create a Budget
In order for the rest of the tips on this list to make a difference, you first need to create a comprehensive budget so you can account for all incoming and outgoing funds. Since you likely get irregular paychecks, you will need to make some estimations with your budget. Look at the past year and take note of the average amount of money you make each month. Then, compare those potential earnings with your current expenses.
Read: How Do You Make Ends Meet on a Bad Month?
Keep in mind that your budget can be fluid from month to month. If you make more in March than you did in January, then you can adjust your budget and bring on more necessary expenses.
2. Save Money However You Can
You can also make your budget more manageable by eliminating flexible expenses that you don’t necessarily need. It might be nice to get Starbucks and stream your favorite show for inspiration, but if you can’t realistically afford these perks, then consider eliminating them for now. Once you start earning good money again, add them back one by one as your budget allows.
Here’s a real example: Last year, when my income dipped for a while, I canceled HBO Max and a couple of other streaming services. It was only several dollars, but every little bit helped.
However, if you don’t want to cut these little luxuries out of your life, look into passive income apps like Honeygain, which can help you earn money without putting a lot of effort and time into it.
Working from home can also help you save a significant amount of money on expenses, as you may not need to purchase expensive clothing or pay for costly vehicle maintenance. But, of course, you probably still use your car, so find ways to save in this area. For instance, you can save money on gas by ensuring that your tires are properly inflated and by driving at a reasonable speed. Again, every little bit counts.
3. Find Higher-Paying Clients
Another way to earn money to balance the budget is to find higher-paying clients. If you have been at your freelance work for a while, then you may be able to bring your rates to the next level. You can find higher-paying work by putting your best samples on your website as well as glowing customer reviews, so potential customers will be motivated to pay top dollar for your great work.
If you are delivering high-quality work and your clients love what you do, then the issue may be that your rates are too low. When you are figuring out a fair rate for your work, you need to look at how much you need to earn to live and keep a roof over your head and then charge accordingly. Once you figure out a rate, stick to it. Your work is worth it.
4. Keep Track of Your Time
When you are a freelancer, you don’t have a payroll system where you can clock in and out, so you will need to keep track of your time. There are several benefits to tracking your time. One big benefit is that when you track how long each task takes, you can streamline your processes so you can get more done in less time. You are also more likely to get work done in a timely manner so you can shut your computer and enjoy a work-life balance.
Here’s an improved version that includes the client perspective:
The other benefit to tracking your time is that you can accurately bill clients for your time. If you are being paid hourly, then you don’t want to sell yourself short. Start a timer every time you begin an assignment and get the money you deserve.
From the client’s perspective, detailed time tracking also builds trust and transparency. When you provide specific breakdowns of how time was spent on their project, clients can see exactly what they’re paying for. This eliminates billing disputes and helps clients understand the value they’re receiving. Many clients prefer working with freelancers who track time meticulously because it demonstrates professionalism and accountability.
Additionally, accurate time records help both you and your clients plan future projects more effectively. Clients can budget more precisely when they have historical data on how long similar tasks actually take, rather than relying on rough estimates.
My recommendation: Toggl Track is free and allows you to track time super easily!
5. Save for Emergencies and Retirement
If you find that you have a surplus of funds after a particularly good month, then it’s a good idea to open a high-yield savings account that can act as an emergency fund. As a freelancer, this fund is even more critical since your income fluctuates unpredictably.
Build this fund strategically during your good months to cover the lean periods. For example, if you normally earn $3,000-$5,000 monthly but just had an $8,000 month, immediately set aside that extra $3,000-$5,000 before lifestyle inflation kicks in.
This fund should cover situations like:
- Covering your rent and bills during a slow month with few clients
- Bridging the gap when a client pays late (which happens frequently)
- Maintaining cash flow between project completion and payment
- Unexpected business expenses like computer repairs or software renewals
- Personal emergencies when you can’t afford to take time off work
Since freelance income is inherently unstable, aim for 6-12 months of expenses rather than the typical 3-6 months recommended for salaried employees. If your essential monthly expenses are $3,000, work toward saving $18,000-$36,000.
The key is to treat good months as windfalls, not your new normal. When you land a big project or have multiple clients paying simultaneously, resist the urge to upgrade your lifestyle and instead funnel that surplus directly into your emergency fund until it’s fully funded.
6. Don’t Forget About Health Insurance
One of the perks of working for a traditional company is that you have access to health insurance, but as a freelancer, you are essentially on your own. Luckily, you can obtain high-quality insurance by visiting the healthcare marketplace, where you can find suitable plans that meet your budget. You may also be able to get onto the health plan of a significant other. When it comes to important expenses like insurance, savings, and retirement, it is a good idea to set up a separate account. When you get paid, put a portion in that secondary account and only use that money for the applicable expenses.
Take Control of Your Freelance Finances Today
Managing your finances as a freelancer doesn’t have to feel overwhelming. By implementing these six strategies—creating a budget, maximizing your savings, pursuing higher-paying clients, tracking your time, building emergency funds, and securing health insurance—you’re setting yourself up for long-term success and financial stability.
The key is to start small and build momentum. You don’t need to tackle everything at once. Choose one area where you feel most behind and commit to improving it this week. Maybe that’s finally setting up that high-yield savings account, or perhaps it’s reaching out to three potential clients who pay better rates than your current roster.
Remember, every successful freelancer started exactly where you are now. The difference between those who thrive and those who struggle isn’t talent—it’s having solid financial systems in place.
Your next step: Pick one tip from this article and implement it in the next 48 hours. Whether it’s downloading a budgeting app, researching health insurance options, or drafting a pitch to a higher-paying client, taking action now will compound into significant results over time.
Let us know how you do, all right?
[First published in January 2023; UPDATED July 2025]
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