Protecting Your Finances as a Freelancer

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You may have more freedom, but you also have more responsibility.

There’s a certain adventurous romance about being a freelancer. You get to make your own hours, choose what jobs you do and don’t work, and if someone demands to talk to your manager, then good news, you’re your manager. But while the freelance life does come with its freedoms and perks, it also necessitates a very particular approach to life. When you’re not under a company’s banner, you need to handle everything that they would normally take care of for you yourself. The resulting pain in the butt can make the whole experience not worth it for some, but if you’re resolute, then keep a few things in mind.


The first thing you need to have absolutely locked down is a safety net. I’m not just talking about insurance, though that is a factor that we’ll get to in a moment. As a freelancer, you are your own company in its entirety. The company’s successes and failures are your successes and failures. In the event that work dries up, and occasionally will, you need to be able to keep yourself afloat without letting your entire business model collapse. Start a separate savings account exclusively for usage in that particular emergency situation.

In addition, as I said a minute ago, you’ll want insurance, not just for your general health, but for income protection. If you work with your hands, and your hands are injured, you’re out of luck unless you have a backup plan. Some territories don’t offer this, but wherever you live, look into income protection insurance.

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As a freelancer, you only have so much time in the day to do your work. Time is money, and if you’re wasting time, you’re wasting money, and that’s just sick. It’s a two-step process: first, you need to establish rates for your work that will pay your bills without scaring off customers. Second, you need to choose your jobs very carefully. If you think a job is too hard, too far out of your skillset, or too long, then don’t waste time on it. If you burn all of your time on one job that doesn’t make up the difference, you’re doing yourself a disservice.

The key to being a freelancer is learning how to play the system. It’s harder for a large company to find wiggle room through all the red tape of large-scale finance management, but as a single person, you have more room to make the rules.

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3 weeks ago
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