freelancers finances

Being a freelancer who works from home has its perks. There’s this satisfaction that you get from avoiding a long commute to work.There’s also the freedom to manage your own time and ensure a better work-life balance. These are the primary reasons why a lot of people have already decided to pursue freelancing.

Freelancing, however, has its downsides, too. Working alone at home can get lonely at times, without having a team to work with. Another downside to it is the lack of administrative support. It can feel like you’re a one-man army when you work as a freelancer.

For one, you have to look for clients on your own so you’re acting like your own marketing department. This is especially true for those who are just starting freelance work without regular clients yet. Unlike working in an office, there’s also no finance department to help you take care of the expenses and the invoices so you have to do all these things on your own.

Personal Finance Management for Freelancers

Financial management for freelancers is not much different from managing your own business. Let’s look at some areas of finance that freelancers can take care of:

Expense Tracking

As a home-based freelancer, business expenses and personal or household expenses can be difficult keep apart, but that’s how it should be. This is especially true if you’ve negotiated with your client that you can charge them for certain expenses. Expenses related to official tasks may include your monthly bill for broadband connection,office supplies such as reams of paper or envelopes, or maybe even that lunch bill that you incurred after meeting with somebody.

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The important part about managing expenses is to keep the official receipts. Store these in an envelope or scan them so you can send them to the client with your invoice. You could also use one of the many apps available on your smartphone for this purpose. If you opt to use a credit card, you can also review your credit card statement to identify the expenses that can be charged to clients.

Invoice Tracking

Tracking the status of invoices is an important part of financial management for freelancers. If you only have one client, it’s likely that you only need to send an invoice once or twice a month or even at the end of every week so this task will not be too hard to do. A simple way to do it is to create a spreadsheet with separate columns that indicates the date that you sent the invoice, the amount charged on the invoice, and the status of the invoice (whether it has been paid or not). I use the Google Drive’s Spreadsheet so I could access it wherever I am and there’s less chance of me losing this important file if my computer’s hard drive crashes.

Exchange Rate Tracking

If your client is overseas, it’s also possible that they will pay you in a different currency. The fluctuations in the foreign currency exchange markets can affect your income so it’s good to keep track of this figure as well. For me, I also use the same spreadsheet to track the fluctuations in the exchange rate. I don’t need it to be in-depth, I just put in the exchange rate on the date that I transferred money to my bank.

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Income Tracking

I don’t know of a freelancer who doesn’t like getting paid. If your clients are prompt with their payments, then it’s a good thing; but delays sometimes happen, and you need to keep track of whether your clients have indeed been keeping up with their end of the bargain. You’ll also need to track your income for tax purposes.

Build an Emergency Fund

Once you get paid, don’t forget to build an emergency fund. Freelance work means having an irregular income so building an emergency fund is especially important. Project your expenses and build an emergency fund that could last you for 8 months to a year. It helps protect you for those times when clients are hard to come by.

Get Medical Insurance

Medical insurance is also important for freelancers, especially since your ability to earn is dependent on you being healthy enough to do your tasks. You don’t have the support of a human resource department for this so you will need to compare medical insurance and look for one that has affordable premiums yet still provides wide coverage.

Author’s Bio

Ryan Del Villar works as a Content Strategist for MoneyHero. During the weekend, he works as a freelance Online Reputation Management writer.


Founder and chief editor of Blogger, Affiliate Marketer, Tech and SEO geek. Started this blog in 2011 to help others learn how to work from home, make money online or anything related to business and finances. You can contact me at

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