6 Money Management Tips for Busy Freelancers

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Good money management skills can help you be more successful as a small business owner. Find out how busy freelancers can better manage their finances. [[{“value”:”

Freelancing is hard work, but it can provide a more flexible lifestyle than a typical 9-5 job. As a freelancer, you’re likely juggling multiple tasks and projects. Even when your work schedule gets busy, taking good care of your finances is essential.

I’ve been a freelance writer for seven years, and throughout the years, I’ve made adjustments to manage my money better. Here are some strategies that have helped me succeed as a freelancer.

1. Stick to a budget

It can take time to grow a freelance business, so keeping your spending in check is essential. Setting and following a budget is a good money management move that can help you avoid racking up expensive debt. You can use one of the best budgeting apps to guide you. With time and practice, it becomes easier to follow a budget.

2. Keep your business finances separate

You can operate a freelance business without opening a business bank account, but keeping your business finances separate is best. When you continue using your personal checking account while freelancing, things can get confusing come tax time, and you may struggle to understand where your business finances stand.

It’s easy to open a business checking account. Review account features and fees as you explore options, so you know what to expect. A dedicated business bank account can help you stay organized, so you can make informed financial decisions that impact your business.

3. Automate your savings

Whether you’re saving for emergencies, taxes, a future vacation, or upcoming business expenses, automation can help. Life gets busy, especially when juggling multiple clients and projects, and you can save time by putting your savings contributions on autopilot. Through your bank, you can enable automatic transfers to move money into your savings account regularly. Doing this can help eliminate forgetfulness and stay on top of your savings goals.

4. Use digital tools and software to track income and expenses

It’s essential to keep good financial records when freelancing. You must report every dollar you make to meet your tax obligations. One option is to use accounting software to track your earnings and expenses.

Another option is to use free solutions like Google Sheets. This approach has worked well for me and makes tax season less stressful. Options like this can help you stay organized and save you time.

5. Make quarterly estimated tax payments

Here’s another tip: make quarterly estimated tax payments. Doing this can save you money by avoiding penalties and eliminating the stress of paying a hefty tax bill in April.

The IRS requires workers to pay taxes as they earn income. So, as a freelancer, you must set aside money for taxes and make quarterly payments. You’ll need to pay self-employment tax, federal income tax, and any local or state income taxes you might owe.

Making quarterly estimated tax payments can ensure you pay enough taxes throughout the year. The IRS will impose penalties if you pay your taxes late or underpay. The best strategy is to set aside money regularly to save for this expense and submit quarterly payments.

6. Plan for slow periods and days off

There will be days when you don’t have the energy to work and times when work may be slower. Plus, you’ll want to take a sick day or vacation day when necessary. The last thing you want to worry about is whether you can afford to step away from work.

Make sure you plan for these moments by stashing some extra money away. I set aside some of my earnings for sick days and emergencies so I can afford to rest. Because I automate my savings, the money is in my high-yield savings account when needed.

Keep your finances in mind

Staying on top of your finances is wise, no matter what kind of work you do. But busy freelancers can especially benefit from developing money management skills. The above tips may help you stay more organized as you navigate your freelance journey. For additional business financial tips, check out our small business resources.

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