Freelancing is actually more financially stable than full-time work. Because a freelance career is unpredictable in nature, it forces freelancers to be realistic about their finances. Full-time gives workers a false sense of security making it easier for them to ignore things like saving, investment, and general financial management. When they learn that their job isn’t so stable, they aren’t prepared. Freelancers have no way of denying these realities. They’re constantly faced with them because they regularly have periods of no work. The only way for freelancers to survive is to constantly be analyzing and improving their budgeting and spending habits. This may seem like a difficult nerve-wracking existence, but 57 million Americans freelanced last year. Clearly this life is not only possible, but fulfilling.


This couldn’t be more obvious, but it’s great to have some degree of savings when you start freelancing. Freelancers more regularly switch jobs than an employee does, which means they have more time between jobs, which means they make money less consistently. Eventually, a successful freelancer will be filling most of their days with work, to the point where they’re trying to find time to take off (but that’s another article). In the beginning, this probably won’t be the case, and even experienced freelancers go through dry patches.

There are tons of estimations and opinions and formulas on how much you should be saving: 3 months’ rent, 6 months’ rent, 9 months' rent, 3 months' salary, 6 times your monthly expenses. None of these are the right answer because that’s something you’ll figure out by budgeting yourself and keeping track of how much you need. Figure out the average amount of time you generally spend between jobs. This average probably won’t be found before at least a year of working freelance. Once you’ve figured out that average, figure out how much money you need to get you through those periods, then double that. That’s at least a good starting point.


Being financially responsible isn’t only about putting money in the bank, it’s also about cutting costs. This doesn’t necessarily mean cutting everything superfluous, it means spending in a way that’s meaningful to you. Freelancers don’t live out of a cardboard box, they align their expenses with their values and ambitions. A great way to determine if your spending aligns with your values is to compare your checkbook to your calendar. Are the things you’re spending the most money on also the things you spend the most time doing? If you take the train most days then why are you spending money on a car lease? If you’re eating out on the weekends why are you spending money buying groceries every Friday? If you love going to the movie theater why do you spend so much money renting movies on Amazon? Don’t think of this as cutting costs. Think of it redistributing those costs to the products, activities, and services that actually give you joy. Realigning your spending this way will make you a much better judge when it comes to purchasing new things. You’ll have better answers to the questions “do I need this? Do I want this?” When our spending is actually representative of who we are, we feel more comfortable and confident when taking out our wallets. Everything we have can more easily be defended as something we genuinely want or need.


You know what’s a great way to increase your savings? Make more money. It’s not uncommon that when someone rearranges their budget to match their values they might still be spending more than they would like. That’s totally okay. At least now you know, or are more certain, that all the things you’re paying for are actually worth it, so you can refocus your efforts. Once you feel comfortable that your budget reflects you properly, you need to start comfortably meeting that budget. If you need more work to support your spending, then you need more work. If you don’t want to work more then clearly your budget doesn’t line up well enough with your values, and it’s time to go back to cost redistribution. Your income should be able to match your budget without worry, and still have money left over to put into savings.

That’s of course easier said than done. We started off talking about how freelancers spend more time unemployed than they would like. Starting out in any new career requires us to cut expenses for a while before we get more consistent work, but think about your lifestyle. If cutting expenses for a year or so doesn’t align with you, then you really need to have savings upfront, or to build your freelance career on the side while you keep your full-time job, or to fill your time between freelance jobs with gig-work like Uber. There are many ways to keep your income high during the early days of freelancing. They just mean working more, or alternatively, transitioning into freelance more slowly.

You need to compose your personal finances in the same fashion you do your lifestyle: bespoke. A freelance life is tailored to you, your budget should reflect that. Once that’s achieved, you’ll be more financially stable than most people you know.