The Freelancer’s Guide To Budgeting



Foregoing a traditional nine to five for a slew of freelancing gigs is not for the weak at heart nor someone who struggles to stick to a budget. ‘Freelancer’ sounds different than ‘business owner,’ but they are one in the same. As a freelancer, you are running a very small business that requires all of the skills a business does (aka marketing, operations and most importantly accounting). Once you have a system in place for sending invoices, depositing payments, and paying taxes, you need to take pen to paper and design a budget. And we aren’t just talking about your personal budget, but instead, your freelancing budget. The costs of being a freelancer may sneak up on you, so it’s time to create a budget that will save you from any costly surprises.

Personal Budget

First we need to get the personal budget out of the way. Tally up all of your necessities like rent, food, utilities, car maintenance, medical, and other expenses. Then see how much you ideally want to save every month towards buying a home, retirement, or for emergencies. Lastly, think about how much money you would like to have for unnecessary expenses like shopping or entertainment. But don’t get too attached to this number, as you might need to adjust it based off the rest of your budget.

Check In: Are you generally making enough each month to cover your living expenses without any stress? Make sure you are living within your means, or even under as freelancing income ebbs and flows.

A Backup Plan

Do you have savings separate from your savings? Confused yet? Let us clarify. You have a savings account with money to cover unexpected medical expenses, to save for a wedding or to help with childcare expenses. But you also need a separate budget that will be your backup if one of your clients doesn’t need your services any more or payment is not coming on time. You don’t want to be dipping into your savings every time you have a freelance hiccup, so have a separate savings account with at least one month’s income to get you by in the case of a freelancing emergency. It will be challenging at first to save this money if you are on a tight budget, but once you have it saved you will be able to sleep much easier at night when you know you can make ends meet no matter what.

Check In: Have you adjusted your budget to be more conservative while you save up this initial chunk of change? Also make sure you have separate savings accounts so you don’t accidentally spend money you were planning to save for something else.

Freelancing Expenses

While freelancing costs are relatively low compared to running a storefront or hiring employees, there are still business expenses you need to account for. Do you need monthly software subscriptions, a social media management program, a membership to a co-working space, equipment updates or supplies? Of course you do! These expenses will be paid with your income so make sure you are charging appropriately to pay for them and that you are being mindful of what you purchase.

It is easy to fall into a trap of buying whatever you need to be successful, but as a freelancer, you have to be careful about overspending. What is even worse than those obvious expenses? The sneaky ones, like that $6 latte you buy every time you need to get out of your house and want to work from a coffee shop. Little things like that should be in your budget. Do you get a blowout every time you go to a networking event? Add it to the budget!

Check In: When tax season rolls around are you writing off your business expenses? Check out the IRS guidelines for more information.

Our Favorite Finance Tools


As a freelancer your business expenses are small enough that you probably don’t have a business account separate from your personal account. If this is the case, Mint will help you budget for both and keep track of which expenses were for what purposes. You can label purchases to help sort which are for business and personal and you can sort them by category. You can also set separate savings goals and track your progress.


If saving isn’t your strong suit then give Digit a try. Digit uses algorithms to analyze the money that goes in and out of your bank account and then makes small withdrawals they predict you won’t miss. But don’t worry, if Digit determines you can’t spare any money, it won’t withdraw anything and backs it up with a “no overdraft guarantee.”


The tried and true envelope method of budgeting: each month you categorize your expenses and fill separate envelopes with cash to spend only for specific costs. This has been around for some time now. It is a great system that can stop you from overspending and assure you have enough money to cover your expenses, but it also requires you be very organized. Goodbudget is a digital version of this system that will help you follow the envelope method without all the fuss of organizing your cash and having the proper envelope when you need to make a purchase.

123 Easy Expense Receipt Tracker

If your purse is overflowing with crumpled receipts, it is going to be hard to keep track of expenses. But of course, there is an app ready and waiting to solve that problem. 123 Easy Expense Receipt Tracker lets you take a photo of a paper receipt and captures and stores the date, expense details, retailer name, and item list. The beauty of saving receipts is that you can see exactly what you spent on specific supplies unlike a bank account which just shows the overall cost of a purchase. When it comes time to reflect on your spending, this digital expense log will make your accounting work so much easier.