Managing Your Finances as a Freelancer

Because they won’t manage themselves

Tae Haahr
Tae Haahr
Jul 31, 2019 · 9 min read
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Photo by Fabian Blank on Unsplash

If you’ve just started your freelance journey or you’re planning on starting soon, then it’s important that you start your finances off on the right foot.

I’ve been freelancing for just over a year, and as prepared as I was to start (I really wasn’t) and as business-orientated as I am (this is true), my freelance finances have continued to boggle my mind.

But over the past 12 months, I’ve picked up a few tips, tricks and insights about how to manage your finances.

Keep your business and personal separate

First thing’s first, your business income is not your personal income, even if you do need to pay yourself with it. That means the first step to managing your finances as a freelancer is to separate your business and personal finances.

Separating your finances means taking yourself down to the bank and opening a separate business bank account. Having a separate business bank account means that tracking your income and expenses is much easier.

The other thing that really helps when it comes to keeping your personal and business separate is having a business credit card. But having another credit card is more added financial responsibility, so use it carefully.

I have a low limit business credit card where I put my recurring and one-time business expenses. Things like website hosting, design programs, my accounting software and social media scheduling program all go on this card.

A separate business bank account, and in cases where it makes sense a credit card, go a long way towards easy freelance financial management.

Create a budget

Budgets aren’t just to ensure you don’t spend too much money on shoes or rent too many films on iTunes (guilty), they’re also important for your freelance writing business no matter what stage you’re at.

Not only is a budget an important business tool in general, as a freelancer a budget can also help you manage your finances through the fluctuations and dry spells. If you make $10,000 one month and $2,000 three months later, your budget can help ensure you don’t spend too much when you’ve hit a good month and are able to compensate during the bad ones.

It’s best to use your average monthly income as your budget number, which might take a few months to figure out. With that in mind, it’s important to regularly review and modify your budget on an ongoing basis to ensure it works best for you and your business.

Track your expenses

While what you can claim on your taxes as a business expense varies from jurisdiction to jurisdiction, but there are a ton of things that you can claim as business expenses. And claiming expenses means you need to track them.

Tracking your expenses can be a tedious task that is easy to push away. But it really is important because at the end of the year when it comes to doing your taxes (or, more accurately, getting your paperwork to your accountant) you don’t want to have to do it all in one sitting.

Tracking your expenses means tracking your expenses, classifying what kind of expense it is (ie. marketing, client acquisition, etc.) and, probably most importantly, keeping your receipts!

Tracking and predicting your income

Tracking your income is important because your income is the reason why you’re a freelance writer. While you might love writing, graphic design or whatever else it is that you’re selling, you need to make money to pay your bills.

It’s not enough to just get the money in your bank account, though that is obviously important, you need to know how much you’re bringing in and how much your time is worth. I like to go one step further and predict my income, that way I know how much I should be making in the next month (and further, when possible).

To do this, I built a specialized spreadsheet on Airtable (yes, this is an affiliate link but you can sign up to use Airtable free using it) where I enter work as I finish it to track my ongoing income. That same spreadsheet has a separate tab where I predict my income as well.

Manage the tax problem

Running a business on your own means that you need to pay your own taxes. Yes, everyone pays taxes (or everyone should), but typically, at least here in Canada, your taxes are taken off your paycheck and there’s little to no work on your end.

In the case of freelance business owners, you are responsible for paying your taxes at the end of the year. And that means putting money away for your taxes on an ongoing basis.

To figure out how much you should be putting away for your taxes, you should speak to an accountant in your jurisdiction. But to give you an idea of the cost of taxes, I put away around 25 percent of my income into a separate bank account for taxes each month.

Invest in an invoicing program

Yes, you can build invoices on Microsoft Word or Google Docs, but I highly recommend hooking yourself up with a good invoicing program.

There are a ton of great programs out there, but I would highly recommend finding one build for freelancers.

I personally use Bonsai (yes, this is an affiliate link, but I highly recommend it) which not only sends out invoices but can track time, send out proposals, manage expenses, set up tasks, and my favourite part, send out projects.

An invoicing program can help ensure your invoices are sent on time, tracked properly and manage your income.

Manage your payment collection

For some reason, every article I read on managing finances and collecting payment for small business owners advises people to take as many different payment systems as they can — but that’s ridiculous advice, finances are hard enough to manage as it is.

There is no way you’re going to want to be managing five or ten different payment programs. Seriously, I have three and that’s enough as it is.

From my experience, Paypal is what most clients want to use. Which is great because Paypal is easy enough to use and their fees aren’t ridiculous. My second major payment system is Stripe. Both Paypal and Stripe integrate with my invoicing program which makes it easy for clients to pay right from the invoice I send them monthly.

It’s important to remember that every payment collection you add to your freelance business means added administration time. While it might not be a ton of extra administration, every second counts — there is a lot of administration that goes into running a freelance business.

Set time to do your bookkeeping

Bookkeeping is a tedious task, and as I mentioned before, it’s really easy to drop it to the bottom of your to-do list. But you can’t do that, because the longer you leave it, the more work it’ll be.

I set aside about an hour (sometimes two) a week to manage my finances. This means tracking my expenses, check on my payments and calculating my income. A little bit of work per week means less of a headache at the end of the year.

Track your time

Tracking your time doesn’t seem to be an obvious way to manage your finances as a freelance writer, but it really is an important part of it.

Tracking your time helps you more effectively see how much profit you’re actually making, and what your pricing should be. If you find that you’re making less than you need to be to bring in your bottom line when it comes to calculating how much you are actually billing per hour, even if you’re not billing hourly.

Follow up on late payments

It’s surprisingly easy to let late payments go. You send them out and they’re due a few weeks or even a month later and you forget. Then you remember six weeks later and it feels awkward to approach your client about it.

But this is a business, you did the work and you deserve the payment. There are many freelancers that find the art of missed payments to be a challenge, but it’s important that you put in the time to collect what’s owed to you.

It doesn’t matter how much a client says they’re going to pay you if they never send the cheque. So set aside some time on a monthly, bi-weekly or even weekly basis (depending on how much of a problem late payments are for you) and check-in with any outstanding invoices.

I have also found adding a late fee to be a great deterrent for late payments. But it’s important you stick to them and don’t write them off. Luckily for me, Bonsai has a late payment feature and my clients have no choice but to pay the entire amount if they forget to pay on time.

Don’t forget about your credit!

Your credit is important, especially if you’re going to be a business owner.

Keeping your credit clean and good means paying your bills on time, spending within your means and purchasing only the things you need. And absolutely make sure you pay off your credit cards on time. Credit debt is not good!

Plan for fluctuation

Freelance work is unpredictable. Even if you have a regular client base, your work and therefore your income is bound to fluctuate month-to-month and you are bound to have dry spells.

When it comes to managing your finances, it’s important that you have enough money saved to cover the dry spells. That means having an emergency savings account that contains enough to cover somewhere between six months to a year of monthly bills. Hopefully, you won’t have a dry spell that lasts that long, but it’s great to be prepared for any situation.

Check-in with your finances regularly

I’ve mentioned check-ins and reviews a number of times throughout this post, but it really is important enough to warrant its own heading.

I personally check in with my finances. Sometimes that means simply signing into my bank account and going through everything, other times that means checking in on outstanding invoices or even checking in to see that my revenue is on track.

In addition to the time I set aside to do my expenses and invoices, I typically have a 15 to 30-minute accounting slot a day. Sometimes I barely use that time and others I get ahead of my impending financial tasks. The honest truth is that if you do just a little bit every day, there’ll be less big chunks of it.

Find a good accountant

While I can tell you all the things I’ve learned over the last year about managing your finances as a freelancer, I am not an accountant. My insights are purely experienced-based and not professional in the least bit. Therefore, I would highly recommend finding yourself a good accountant.

A good accountant in my books isn’t just any old accountant from the firm down the street, but someone who genuinely understands the freelance field and what kind of finance practices you need to undertake to be successful.

While you might not be able to afford a monthly bookkeeper, it helps to at the very least have a professional do your taxes and hear any insights they have to give you. Accountants are a great resource, because not only can they help you set up successful finance practices, but they also give some pretty great business advice.

Freelancing finance

Managing your finances as a freelancer might seem like it’s way over your head, too hard to deal with or simply out of your wheelhouse — but I assure you that if it’s not something you undertake on your own it won’t get done.

There isn’t anyone checking up on you, and accounting matters are one of those things that can seriously get out of hand if you don’t make a point of taking care of it. So make sure you get off on the right foot!

What tips have you found helpful to manage your finances as a freelancer?

Tae is a lost cause who really has no idea what she’s doing in life — so she does a little bit of everything. She writes about single life and being an adult on her blog The Single Girl’s Guide to Real Adulting and marketing your small law firm on The Legal Rebel. She runs The Lady Dicks Podcast and the upcoming travel blog The Spooky Traveller. Plus she’s currently working on a film.

But it’s not all fun and games for her, she has a Bachelor of Communication in Journalism and a Master of Arts in Intercultural and International Communication. Previously, Tae worked in corporate communication, marketing and public relations. Who says you can’t have it all?

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Tae Haahr

Written by

Tae Haahr

Writer & podcast producer. Marketing insights at, plus-size fashion & lifestyle tips at and ghost stories at

The Startup

Medium's largest active publication, followed by +771K people. Follow to join our community.

Tae Haahr

Written by

Tae Haahr

Writer & podcast producer. Marketing insights at, plus-size fashion & lifestyle tips at and ghost stories at

The Startup

Medium's largest active publication, followed by +771K people. Follow to join our community.

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