Here’s How This Freelancer Creates a Budget That Works

Here’s How This Freelancer Creates a Budget That Works

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As a freelance writer, I have a good idea of how much money I’ll bring in every month — but my estimate is rarely perfect. Sometimes I don’t get as many assignments as I had hoped for, and sometimes clients are slow to pay invoices. There are also months where I earn much more than I had expected, and my bank account is temporarily flush with cash. I’ve cataloged assignments completed and money earned publicly, through monthly income reports at The Write Life . But what I don’t often dig into is how I budget as a freelancer. I’ve been freelancing since 2012, so I know a lot about how to handle the irregular cash flow that comes with the freelance life. Instead of getting a paycheck every two weeks, some clients pay every month, some clients pay every week and some clients pay 30 days after an article is published — which can be three or four months from the date of article submission! Having nightmares about creating a budget? We’ve got your back! Get great tips delivered straight to your inbox. How to Budget as a Freelancer Here are the budgeting tips I’ve developed to help me survive life as a freelance writer. 1. Know Your Monthly Overhead Cost The most important thing you can do as a freelancer — or as any person with an irregular income — is to know your monthly personal overhead cost. This is the money it takes to pay your rent, pay your bills and buy essential items like food and medication. If you have other essential costs such as car payments or daycare, include them in your overhead as well. Leave out money for clothes, entertainment and other non-essentials. My monthly overhead cost is $1,500. This is the amount of money it takes for me to get from one month to the next and pay the bills, keep a roof over my head and put food on the table . If you have irregular income, you must always bring in more than your monthly overhead cost. Every single month, even the lean ones. If you’re not bringing in more than your monthly overhead, you need to focus on earning more money — and luckily you’re on the right site for that! 2. Know When You Usually Get Paid Now that you know your monthly overhead cost, it’s time to figure out when you usually get paid. If you’ve been working with freelance clients for a while, you’ve probably figured out their payment patterns. I have one client who pays me every week, and the rest of my clients tend to pay around the 15th of the month or the end of the month. Even though the amounts in these payments vary, I can expect a little bit of money to come in every week and two big chunks of money to arrive around the 15th and the 30th. Knowing when you usually get paid helps you plan how to stretch […]

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