Freelancing Doesn't Have to Mean Financial Failure

If you asked my 20-year-old self what kind of job I wanted after graduating college, writing would not have been my answer. But, if you asked that same me what I was passionate about, I would have answered "writing" without hesitation.

I've talked to many people who, like I was, are afraid to follow their dreams of being a full-time freelance writer because they’re worried they’ll fail with the financial part. Dreams don't just come true by chance; you make them happen. With freelance writing, it means staying on top of your finances to make sure you can do it comfortably for as long as you want.

Budget monthly (or weekly if it's better for you). It’s simple. Just make a list of everything you have to pay this month and the amount you have to pay. Add it up. That’s what you need to make to pay all your bills this month.

Save. At any given time, you should be saving for three things: rainy day/famine months, retirement, and financial goals like a down payment or summer vacation, in that order. Make it a goal to save some of your income every month.

Use your finances to make financial decisions. Before you make a spending decision consult your budget first to see if and how much you planned for that expense. Then, check your bank account to be sure you have enough money to cover it. Make sure you factor in pending transactions and expenses that are yet to be paid.

Know what’s feast or famine for you. Fluctuating income is a fact of life for freelance writers. But, feast and famine are different from one person to the next depending on monthly expenses. If you make more than what you need to cover your monthly bills, then you’re in a feast month. Less, and it’s a famine. During a feast save some of the extra to use during the famine.

Keep your cost of living low. When you make financial commitments, evaluate the long-term impact on your monthly expenses. The less you can live on, the easier it will be earn what you need to pay your bills. As you make more money, you may be tempted to take on expenses that increase your cost of living. Be careful that you’re not creating a lifestyle that’s more expensive to maintain.

Adjust to changes in your income. If you lose a client, you may have to adjust your monthly spending until you make up the lost income. So you may cut back on some extra monthly expenses – gym membership, cable tv service, grooming services, etc. for a month or two. While you may have money in reserve to help you fill in the gap,  using this money sparingly will help it last longer.

Know when you’ll be paid and budget accordingly. I kind of have two budgets – one based on the money I’m guaranteed to have and one based on the money I’m supposed to have. I have clients who pay before the work and clients who pay after the work. Some magazines, I’ve heard, don’t pay until a month (or several months!) after the work has been published. As much as you can, base your budget and spending on the money you already have. You can’t spend a check that’s “on the way.”

Chase payments if you need to. Don’t be afraid to nudge, push, shove, or badger a client who owes you money. If a debt collector has ever pursued you, you know they have aggressive tactics for getting paid. I’m not suggesting that you harass anyone or do anything illegal. However, sometimes being assertive will often get the results that being nice couldn't achieve.

With freelance writing, you can't take your income for granted. Clients come and go. Income rises and falls. Stay on top of your finances and adjust as necessary. It's tough at first, but it definitely gets easier with time.

Writers: what do you do to ensure financial success?

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LaToya Irby is a full-time freelance writer and a graduate of the University of Alabama. She primarily writes about personal finance, freelancing, and other self-employment topics.

7 thoughts on “Freelancing Doesn't Have to Mean Financial Failure”

  1. I agree that it’s important to keep your cost of living expenses low. I watched Suze Orman over the weekend, and I couldn’t believe the amount of expenses people have. One couple made a combined income of $8,400 per month — $8,400 per month. I would love to earn $8,400 per month!! The couple’s expenses were over $7,000, over $7,000 per month. I sat on the couch thinking, “What the heck are you people spending your money on every month?” They spent $200 every month on alcohol because they entertained a lot. Suze told them to ditch the alcohol and stop entertaining every month. Good advice.

  2. Nice post, LaToya.

    What continues to baffle me is what you’ve expressed in your last point –chasing invoices. Why won’t freelancers do it? From what they say to me, it’s that they don’t want to “offend” or “lose” a client. If they’re not paying, they’re not worth keeping! I’d hate to hang on to a client relationship that’s so tenuous. Get the money and wave goodbye, I say!

    In general, I have a system: I pay myself first, then the taxes, then the rest is for bills. Some say I have that backwards, that bills should come first, but why? If as you’re depositing the check you’re removing a percentage for savings and taxes, you’ll never miss it and you’ll be more inclined to earn a bit more to cover any shortage. Consider yourself a bill. Even if you’re a Mary. 🙂

    • Yes! Paying yourself first is one of the best ways to make sure it happens. Otherwise, you may not have much left after bills and taxes. Or, you may want to have fun with what’s left. I include a line item on my budget for savings just like every other expense.

  3. You’re right about not being able to spend money that’s (supposedly) on its way. That’s often the most stressful part of freelancing – I hate being forced to take money out of my savings to cover bills when I’m waiting for the proverbial check in the mail.

    Thankfully I have a couple of regular clients I can count on to pay quickly, but I just spent over a month chasing a payment for work I did in June. It was published in July and I had to get quite aggressive before they bothered to pay me…in October. (And then, they shorted me a few dollars.) I have another client who said they were paying over a week ago and the check still isn’t here. Luckily, that’s a local client, so if it’s not in today’s mail I will stop by their office this afternoon to collect it in person.

      • As a freelancer, getting your cash flow going isn’t always easy. This article’s got some great tips for keeping on top of your finances!

        What’s the best way you find of making sure clients pay on time? Do you agree contracts with your clients up front?


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