How to Budget a Freelance Writer's Fluctuating Income

I know what you’re thinking, Ugh. Budgeting. The only thing worse than budgeting is licking sandpaper. As boring as it feels, budgeting is especially critical for you as a freelance writer, because your income is less predictable.

Creating a budget takes just three steps: totaling your monthly income, subtracting your expenses, and adjusting your budget based on the result. You’ll create your budget using the same basic process, with some extra steps to compensate for your fluctuating income.

Projecting Your Monthly Income

You may not know for certain what your income will be for a particular month, but you can use one of these methods to project your monthly income.

Average income. If your income swings from one month to the next, use an average of your previous 3-12 months of income. If your income is seasonal – you earn more money during certain times of the year – use a 12-month average. If you don’t have 12 months of income history, use what you have. If you’re brand new to freelancing and don’t have any freelance income, consider using the “educated guess” method for a few months.

Minimum income. If your income doesn’t fluctuate very much, you can use your minimum income from the previous 12 months. This is often the safest method because your budget is based on a worst-case-scenario income.

An educated guess. Use contracts and quotes to project what your income will be for the upcoming month. This is not an arbitrary number you make up so you can excuse your overspending. It is a realistic number that’s based on facts.

Add Up Your Monthly Expenses

The purpose of a budget is to make sure you have enough money to pay all your expenses, so spend a fair amount of time figuring out the expenses you have to pay each month. To make sure you include everything, look at:

  • Bills and credit card statements
  • Cancelled checks
  • Receipts
  • Your bank statement

Add up all your expenses and compare the total to your monthly income. If your expenses are higher than your projected income, go back through your budget to see where you can cut back to make ends meet. Some months, you may not make enough money to meet all your expenses. Prepare for those months by building a savings to make up the difference between your actual and budgeted income.

Use Extra Income to Build a Cushion

During the months when your income is higher than projected, set the extra money aside. Then, when your writing income isn’t high enough to pay your expenses for a particular month, pull from that savings to cover all your expenses.

For example, if your budgeted income is $2400 and you make $2700, save the extra $300. On the other hand, if you budgeted $2400 and only make $2100, use the $300 you saved to make up the difference.

You’ll be tempted to spend the extra money because you earned it, you deserve it, and a slew of other reasons, but resist the urge. You will need that money in the future.


Separate your expenses into things you must have to survive (your needs) and things you’d like to have but can live without (your wants). For example, you must pay your rent or mortgage, but can survive without cable television. When your income is limited, take care of your needs first. Don't just let bills go unpaid. You'll just end up owing more money. Instead, cancel services temporarily until you can afford them again.

Pay yourself a salary equal to your budgeted income. This way, even though your freelance writing earnings may fluctuate, your personal income will be steady. I prefer to pay myself monthly (I actually work a month “in the hole”) but you can pay yourself weekly or bi-monthly. Just remember to divide your monthly salary by four for weekly payments and two for bi-monthly payments.

Use two accounts, one that accumulates your writing income (this is where you pay yourself from) and one that you spend from (this is where your paychecks go to). Transfer only your salary even during the months you make more. If you find that your cushion account is always at $0, you may be transferring too much money. Cut your expenses or increase your freelance writing projects.

How do you feel about your budget right now? Is it working? What tips can you share? If your budget isn't working, post your questions in the comments and I'll give you some tips.

Profile image for LaToya Irby
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.

Get More Content Like This in Your Inbox

Did you enjoy this post? If so, please subscribe to the All Freelance Writing newsletter where you'll be notified of new blog articles and receive subscribers-only content.

Subscribe now.

5 thoughts on “How to Budget a Freelance Writer's Fluctuating Income”

  1. Latoya, you are a godsend. I know I should have known how to do this, but common financial sense seems to evade me for my freelance writing business. Thanks for this practical and usable guide.

  2. @bestgirls – It depends on a few things like: your filing status, number of exemptions, personal deductions, business deductions, and dependent children. For the 2009 tax year, If you are single with no kids, you’ll start to owe after $9,350.


Leave a Comment