This Simple Trick Will Help You Win At Money As a Freelancer

How to budget when you’re a freelancer

Andrew Macrae


Photo by Joost Crop on Unsplash

Yesterday I wrote about the three mindsets you need to cope with the variable income that comes along with being a freelancer:

Today, I’m going to talk about something more specific.

This is the simple trick I use to stay on top of my budget, even though my income varies wildly from month to month.

How it works

The trick is to split each payment you get into percentages of the total based on the different categories of spending you do.

Then you pay yourself into different accounts for each type of spending.

That way, even though your income varies from month to month, the proportion of each payment you spend on groceries, for example, is the same — and it averages out over the year.

When you have a good month, you’ll end up with a surplus in your accounts, which you don’t touch.

That’s because when you have a bad month, you’ll be putting less money in, even though you’re using the same percentage.

Make sense?

Here are the steps I use.

Step 1: Work out your fixed costs

First, work out your annual fixed expenses so you’ll know that you’ve got enough to cover your living costs.

Break these costs down into categories like:

  • mortgage/rent
  • groceries
  • utilities and insurance.

Then take the average of your gross income for the past five years, and work out what proportion of your gross you’re spending on each category.



Andrew Macrae

Freelance writer and editor. Sign up for my newsletter about writing, freelancing and whatever is worrying me