Been freelancing for a few years now and honestly never gave much thought to protecting myself financially beyond basic insurance.
Lately I’m realizing there’s probably more I should be doing to cover my bases when projects go sideways or clients disappear. Just wondering how other solo folks approach this stuff without overthinking it.
I just ask for half up front now.
I learned this one the hard way after a client stiffed me for $8k three years back. Now I run credit checks on any new client asking for work over $2k. Takes five minutes and costs maybe $30.
Also started requiring net 15 instead of net 30 terms. Sounds small but it cuts down on the clients who string you along. The good ones pay either way, the sketchy ones usually balk at shorter terms.
One thing that saved me recently was having a simple business savings account that I dump 20% of every payment into. Not for emergencies exactly, more like a smooth out the bumps fund. When you have a slow month or someone pays late, you’re not immediately stressed about rent.
Cash only for small jobs cuts out most payment headaches. Saved me tons of trouble over the years.
Use a simple spreadsheet to track income and expenses. I bill twice a month to keep cash flow steady.
Setting up a separate business checking account is also helpful. It simplifies taxes and helps separate business from personal expenses.
For difficult clients, I invoice right after the work is done instead of waiting for month end. This way, you know quickly if there will be payment issues.
Get your contracts tight first. Payment terms up front, kill fees if they cancel mid project, and always take at least 50% before starting work. That covers most of the common problems.
For the rest, keep three months expenses in a separate account. Not investment money, just cash sitting there for when things go wrong. Had clients vanish twice over the years and that buffer kept me from scrambling for work.
The paperwork side matters more than people think. I keep copies of everything now - emails, contracts, payment confirmations. When clients try to pull stuff later, having documentation saves you.
A few things that work for me:
The biggest thing is trusting your gut about red flag clients. If someone haggles your rate down to nothing or asks for tons of free revisions during the proposal stage, they’re going to be a problem later. Walking away from bad clients before you start is way easier than chasing money after.