How to Take Control of Your Budget as a Freelancer?

09/06/2017 26 comments

Have you ever considered how much you actually do to control your budget as a freelancer? Here’s a very real and very possible scenario every freelancer can at one point or another end up with. An important, or possibly only, client could end a project at any point and end their relationship with you. If you are not careful, this can leave you without a stable income for a week, month or even more, depending on when you can find the next client. Even then, you’ll have to wait for payment from then for a while.

Being a freelancer has its perks, for sure, but not all about it is roses and sunshine. Freelancers must always be prepared for extreme situations like a client suddenly leaving, dry periods without income and the like. The profession is, to be sure, more and more desired and valued, especially among Millennials, as a way to ensure a better work-life balance. After all, if that wasn’t the case, 34% of American workforce wouldn’t choose to freelance in 2016. But nevertheless, many shy away from freelancing for being too risky, not wanting to leave their traditional jobs.

But as long as you control your finances, there is nothing to fear. Let’s see how you can control your budget as a freelancer.

Determine Your Monthly Expenses and Income

Expenses and income
Photo by via Unsplash

One of the biggest misconceptions about being a freelancer is that you don’t have any expenses. Of course this is not true. The only real difference between freelancing and a full-time job is that you don’t have to spend money on gas to get from your home to work and back. And you probably don’t need to spend so much on office supplies and in the office cafeteria. But all the other expenses are still there.

Here’s what I want you to do. Take a pen and a paper and start recording your expenses for the month. This will give you a good idea of how much you spend each month and allow you to be a little smarter with your budget as a freelancer. Or, if you can’t find a working pen, try a spending tracker like BudgetTracker.

Your monthly expenses would include rent and mortgage, credit card loans, taxes (don’t forget to pay these), food, electrical and water bills, transportation, gas (just because you don’t drive to work doesn’t mean you won’t use a car at all), but also any monthly subscriptions to magazines and websites and more.

Now take your average monthly income over the past 12 months and compared that to your expenses. How does it fare? Are you earning more than you’re spending and by how much? Does your income allow you to spend money on more than just essentials like food, utilities, rent, mortgage and taxes? Do you also have enough for yourself and for any “special expenses”?

Now it’s time to prioritize your expenses and create a “worst case scenario” budget. Basically, this budget will include only what’s really essential and, as the name suggests, is something you can turn to in case you’re without clients and projects for some time.

Set Up a Rainy Day Fund


As a full-time employee, your paycheck will arrive at the end of each month, so you’re pretty much set. But if you’re freelancing, like we already established, you don’t have as much security. Don’t let get caught off guard by a dry month and a period without clients and projects (and consequently without payments).

Set up a rainy day fund. This can be a few bucks you’d put into a separate bank account after each client payment, separate from your main account, or you can put the money in the envelope and keep it away from your eyesight, or even, if you have a family member or a friend you can trust with your money, let them handle this account for you. In fact, this last method might work the best as you don’t have to pay the friend (buy them a drink at least) and there isn’t as much temptation to open the envelope yourself.

Now that you’ve set up a rainy day fund, you can have a safety net you can turn to in case of an emergency. By emergency, of course, I don’t mean spending that money on parties, but paying for essentials during a dry or a particularly slow month.

Get More Avenues of Income

A great thing about being a freelancer is that you don’t have to be tied to just one client. In fact, you shouldn’t be. Don’t get into the mindset of a full-time worker and work with just one guy. Get more projects. The more, the merrier.

More clients and more projects means more money in your account, but also more financial security in case one of the clients decides to cancel their project, is late with payment or doesn’t pay you at all. For example, you can have one or two bigger clients where the majority of your income comes and 3-4 more smaller clients to fill in any gaps in your budget.

Also, my recommendation is to never let yourself relax completely. Even if you have a full table of clients, keep looking for new, better paying ones. Remember, clients are not the only ones that can end a contract and leave, just don’t make it a habit of doing this too often and too quickly. The longer the project lasts, the more money you can end up making and your relationship with that client can be better.


Keeping an eye on your budget as a freelancer is extremely important as you can see. Just because you don’t need to commute to your place of work, doesn’t mean you don’t have any expenses. We already established that you have to pay your mortgage, bills, food and more. Unfortunately, for many new freelancers, budget control doesn’t come as easily due to the fact they now have more than one income stream. Hopefully, this post will help you keep a tighter grip on your budget as a freelancer.

What other ways to control your budget as a freelancer do you recommend? Let me know in the comments below and feel free to share this post on social media.