Took me way too long to figure this out, but tracking monthly expenses actually made everything way clearer.
Used to stress about whether I’d have enough for software subscriptions and office rent when client payments were delayed. Now I just set aside a percentage from each project payment into a separate account for fixed costs.
Game changer for my sanity honestly.
I do this backwards.
I calculate my monthly fixed costs upfront and don’t touch that money at all.
So if rent, software, and bills hit $3,200, that’s locked away until everything’s paid. Whatever I make after that? Fair game.
Keeps me from spending money I actually need for expenses.
Separate accounts can help but I stick to one
I just use a spreadsheet instead of juggling separate accounts. List all monthly expenses with their due dates.
Tells me exactly how much cash I need on hand each month without shuffling money around.
Smart move on the separate account. I learned this the hard way after almost missing my hosting renewal because I’d spent the money on groceries.
What really helped was automating the transfer. Soon as payment hits my main account, I move the fixed expense chunk immediately. No thinking required.
Also worth doing:
The buffer saved me when my design software randomly jacked up their subscription price mid-year. Nothing worse than scrambling to cover an unexpected jump in fixed costs.
I use net 15 terms with a late fee clause. Most clients pay on time when there’s a penalty involved. The ones who don’t? They learn real quick after seeing that extra charge hit. Being too soft on payment terms is usually what kills your cash flow.
That works well. I just make sure to pay bills as soon as I get the cash. Keeps things easy.