Freelancing has its highs and lows, and I’m caught in the cycle of not fully grasping my financial standing. Some months are amazing, while others leave me stressing about bills.
It’s tricky figuring out the real balance between income and the risks I take by not having a regular paycheck or benefits.
Save at least three months of expenses in a separate account. Makes the slow periods way less stressful.
Price your work high enough to cover the gaps between jobs. Most people charge what they made as employees and wonder why they’re broke.
I bill enough to live for two months even if I only work one. The feast or famine thing stops being scary when you plan for both parts of it.
Also, get a business credit line while you have good months. Banks say yes when you don’t need money.
I just wing it mostly and hope things work out.
Track everything for at least three months to see your real patterns. I keep a simple spreadsheet with income and expenses.
Set aside money during good months for the slow ones. I usually save about 30% when things are going well.
Don’t forget you’re paying both sides of taxes and need to cover your own insurance. Factor that into your rates from day one.