How to budget as a freelancer?

Get your clients to pay

To budget means that you need to know (or at least be relatively sure) when your clients pay you.

You obviously can’t reach into their pocket and pull out the money they owe you, so there’s some trust there you need to have, but there are systems that you can use and put into place that will help you nudge and remind clients.

Don’t be afraid of doing this. No business can run without money so if you are doing work, make sure you get paid.

Track your expenses

You have to stay on top of your expenses. Taxes being your biggest. Remember it’s not your money, but here in the U.S. you will need to take a percentage of what you bring and put that away. Pretend it doesn’t even exist because it’s not yours anyway.

Aside from that, you have to be mindful of the phrase “it’s for the business and I’ll just get more revenue in to cover this.” It’s a deadly phrase and here’s why.

If you have a 20% profit margin on your services and you buy something for $100, that means you need to bring in $500 in revenue, not $100. Make sense?

You really want your expenses to fight for their worth in your business.

Keep your business and personal separate

This is something that’s extremely important and helpful at the same time. This will make your accountant happy. If you don’t have one, and you do you own tax filings, well this will make your life so much easier.

As a part of this, you’ll want to build up that business account too. Make sure that you have a buffer in there. You need to maintain a certain level of cash in the business.

How much cash should you have really depends on what your plans are. This is an inception moment, because you need to really understand your budget to figure out what this number is.

Pay yourself

You need to pay yourself. There are so many different philosophies around this, but try and pay yourself as soon as you get revenue into the business.

This will be your lifeline of sustainability. If you need $5k in personal monthly expenses, food, shopping, and living your life, then don’t think that all you need is $5k in revenue.

Remember you have expenses to pay, the business to invest into, profits, and spending cash for the business. This is overly simplified but you get the idea here.

Save for your future

This sounds like what an old man would say, but it’s important. Especially when you are young. You don’t want to work forever. So you want to capitalize on the flexibility you have to build a nice nest egg for yourself.

Put a percentage away of your salary into some sort of long-term savings account, like and IRA.

Automate your plan

Whether you have an accountant or not, leverage automation to move the money around.

Most payment systems and banks these days allow you to set up rules to transfer money around.

Whatever your percentages are for your salary, retirement, expenses, and business accounts, consider using tools like Freshbooks, Quickbooks, or whatever your choice is, to setup these rules.

While you are in there, set up reminders to check in on your budget and numbers. Make sure you are on top of your budget so that you can adjust accordingly.

Related Content
Here are some further resources that you'll want to check out that directly relate to the show.

You rock! 🤘


Thank you for listening to the show! 🙏

There are a ton of podcasts you could be listening to today, but you chose mine, and for that I am very grateful.

Obviously without your questions, the Ask Rezzz podcast would not be possible.

So if you enjoyed this show, please share it by using the social media buttons you see at the top of this page.

Also, if you would be so kind as to leave an honest review and rating over on iTunes. They’re extremely helpful when it comes to the show being found by other freelancers such as yourself looking to build an amazing and profitable freelancing business. Not to mention that I read each one personally and can't promise that there won't be a delightful 'thank you'.

And if you haven't done so already, don’t forget to subscribe to the podcast on iTunes, to get the latest episode each and every day.