If you’ve been freelancing for any length of time, you’ve probably noticed that work seems to come in spurts. There are certain stretches of time when you’re completely booked up and then there are times that it seems like there are no jobs out there. If your work comes in such varying cycles, your money will come in on the same cycle.
There will be months that your income is high and some when it’s low. For example, my income for January (which I use to pay my February expenses) was 30% less than my projected income for February (will be used for March expenses). I’d rather my income be more consistent, but since there are few guarantees with freelance life, I’ve learned how to deal with these “feast and famine” income situations.
Don’t Overindulge in the Feast
Just like the economy has periods of boom and recession, so does your income. Feast months are the months that you bring in a lot of money, typically more than normal. I’ll warn you now: after you pay your bills, you’ll be tempted to spend the extra money on all kinds of fun things, like new furniture, new clothes, electronics, etc. The urge will be even stronger if you’re coming out of a period where you didn’t have so much money.
Though you’ll be tempted to spend extra money during feast months, but it’s better to put some of the money aside for those months that you don’t make as much money. I don’t consider this extra reserve the emergency fund you use to pay for unexpected expenses. Instead, this is a separate savings that you use specifically to supplement your income during famine months.
Try Not To Starve in the Famine
Famine months are those that you don’t make as much money as you usually do. While feast months are characterized by too much money, famine months are those that you don't have enough money.
If you’re experiencing several famine months your expenses could too high for the income you’re bringing in. Or, you may not be charging your clients enough. If you’re going through famine months because of a lack of work, you have to consider whether you’re looking for the right jobs, targeting the right clients, or whether you’re cut out for freelancing at all.
Ideally, you can make it through one or two famine months using the money you set aside from feast months. When you use this reserve, only pull out enough money to help pay your regular expenses.
How to Avoid Feast and Famine in Your Finances
Your income goes through feast and famine most often because you don’t have a steady stream of clients paying you for work. This happens when you look for new gigs only when you don’t have any work scheduled. Get into the habit of looking for new jobs and marketing your services for a few hours each week.
Try to recognize famine months sooner rather than later. You may be able to pick up some extra work from your current clients to avoid the famine all together.