Budget Planning

Being a freelancer gives you flexibility and freedom you could never think of while working your nine-to-five working day. Flexibility and freedom , however, come to all the spheres of your life which you probably did not expect or simply forgot to consider while switching to freelance.

Budget management and learning to handle with an irregular income is something everyone should really work on unless you want to become trapped in a typical freelancer's problem. Captain Obvious recommends: spend less than you earn. Boring and simple, isn't it? In fact, it actually is simple to be in the black and bring your balance into the surplus mode. All you need to do is to sit down, make it clear for yourself how much you earn and spend, and follow the recommendation above.

The freelancer's paradox is all about being free and creative, enjoying the process of money making for doing what you really are into, and not having the fidgets about the expense management. And that's where the paradox starts.

Unless we take control over expenses and have no clue how much we spend and why, the result will be exactly the opposite of the desired one. The more you spend, the more you need to earn for a living(meaning the more you need to work). The more you work, the less time and energy you've got for just living your life ,enjoying and generating the creative ideas.

None of us tells a client "Come on, just pay me something and I'll do my job." Then why don't we want to know what the expenses are? Taking control over the income and expenses is extremely important, as it makes things clear about what is affordable and what should wait for a little while.

These short and simple rules will make it easier to understand what's going on in your wallet.

1. Fix your salary.

You are self-employed, that is right. But it doesn't mean you don't need a regular amount of money each month, like a constant salary of the traditional workers. Hard to determine a fair salary? Try to calculate an average monthly amount of the last year. Pay yourself 70% of this amount. You still have 30% to save, so once you have a bad month you feel secure and can live with it. Besides, having savings is still an advantage, as we all love to go on vacation from time to time, buy new things, and yeah, visiting doctors is something we cannot avoid , no matter what we think of it.

2. Track absolutely all the expenses.

Set up a special program or an app to your smartphone, or simply make an Excel file carefully recording all the earnings and expenses within one month. Once the month is over, start a new one. In the end of the month you will have a pretty clear idea of what was just a waste of money, and what you really can't live without.

The ones we find useful are:


This app is one of the most popular among all the money management programs. It gives you all the necessary tools you need to manage your income and expense, savings and budgeting. Mints shows your money flaw in real time including your cash flaw, credit card debts, deposits etc. Moreover, it analyzes your spending habits and helps you to point the expenses you can potentially cut.

GoodBudget (also known as EEBA)

A useful app for those who are ready to create and manage a budget based on their cash flow. The system provided by GoodBudet is similar to actually putting certain amounts of money into the real envelopes per month, which undoubtedly has some sort of an old school charm.


This app is supported by both iOS and Android, as well as has a desktop version, which makes it available from basically anywhere once you have your electronic device within reach. Expensify is cool for having a SmartScan option which lets you collect the receipts, take photos of them and then recognized the amount you've spent keeping the record of your expenses. The manual input is also available. Adding a credit or debit card you can also keep the track of your bank account balance alongside daily expenses and earnings.

As the freelance segment of workers is getting larger and larger with time, you may find lots more apps available considering your special needs and details.

3. Find your bare necessities

Calculate how much you spend on the rent, food and other things that provide your safety and basic needs you cannot get rid of.

In order not to mess up, make sure you earn twice more than this. If that's not possible, try to think of what expenses you can cut, whether it is a car or the rent. Think whether you live beyond your means or not, and try to change the situation before it's not turned into a real problem.

4. Create a "safety bag"

One of the biggest concerns for a freelancer is the lack of work and, consequently, decreasing earnings. None of us is actually proof against changes that affect our financial standing.

The best solution would be to save 10% from your monthly income. By the end of the year you will save enough to sleep a peaceful sleep, so even in case your earnings face dramatic changes, you won't have to urgently seek for some money to make ends meet.

5. Juggle your priorities

If you need to make several purchases for either your work or your personal needs at once, place them in order of importance. Ask yourself what you really NEED now and if there is anything you could lay aside for another month. Apparently, most of purchases can await for a little while, you'll see.

6. Find the ways to save

Regardless of your earnings, find the ways to cut unnecessary/extra expenses. Why using the cable TV if you have wi-fi? Forget about the wire phone, does anyone still use them (Skype could be a fantastic alternative)?

Eating out is fun, but it could be even more fun to get together at home and enjoy delicious home-made dinner in a company of friends.

Try to get less unnecessary clothes(it's just clothes, come on), and in general reconsider your attitude to buying new things. Apparently, a human being doesn't need to buy and consume as much as we are told to. You will be surprised to find out happiness is not about spending money at all.

Cutting all the waste expenses will show you how much time you save, as you don't need to work as much as before to buy things you don't really need.

You'll have more time to just live your life. Isn't that the real purpose of being?

7. Find the new sources of income.

Being a freelancer means you can find a whole lot of ways to increase your income. Design, consulting, copywriting.. if one activity isn't profitable, switch to another one. That's the approach that will help you to keep your head above water. In other words, contribute time and your resources into your self-advancement, as that is proven to be a wise investment.

All in all, budget management is not a heavy burden. Neither it is a measure of your success or failure. We'd rather say it is a challenging game, with you coming victor every month.

Don't waste your money on things. Collect memories and experiences. Don't immerse yourself into the an endless circle of earning to spend and spending to earn. Get out of that, and you'll see how different life feels then.