How to Budget as a Freelancer: A Real-World Example

Tips to get started.

Image created via Midjourney

Ever wonder what other freelancers spend their money on?

Sometimes, we get a glimpse when fellow freelancers share info about their spending, like their tech stack. But overall, full-time freelancers prioritize spending in different ways. Like, how much are they paying themselves? Do they have any savings? Do they spend money to reinvest in their business?

As a former banker, I created a budget for myself very early in my freelance life. (It might have been Day 1, but who’s keeping track?)

Here’s a breakdown of my monthly budget by percentages, which you can use as a guide to develop your own budget. In order to get started, you only need your average monthly income. These are very broad categories, but I’ve added some details about what’s included in each category.

Paying myself: 70% of monthly income

By far, my largest expense is paying myself. In the U.S., I used to operate as a sole proprietor so this was much more informal — I would simply withdraw money from the business on the 15th and last day of the month. Like creating a paycheck for myself.

Now, I operate as a Sub S corporation, so I’m required to pay myself a salary (and use a payroll…