Beefing Up Personal Finance For Freelancers


Extended morning naps, wine and dine with clients, working in the comfort of your own home and doing what you actually love are some of the perks freelancers enjoy. Yet, freelancing is not all fun and play. It involves a tremendous amount of hard work and bravery to live a life full of uncertainties. It is definitely not for the faint of heart.

While freelance work is fulfilling, it also entails difficulties, and the biggest struggle that most freelancers face is the uncertainty of income. Receiving irregular income may be the most financially challenging aspect of freelancing and if not managed properly, may lead to a financial disaster and an easy road back to 9 to 5.
Here are some tips to consider:

1. Establish your financial safety net. The uncertainty on when you’ll get your next paycheck from a client can be a source of stress. Even seasoned freelancers get to experience anxiety during lean months, much more if you are just beginning your freelancing journey. To help you ward off the risk of running into money troubles during offseason, start allocating a portion of your income that goes directly to your emergency fund. Ideally, you want to have at least three months worth of your monthly living expenses in your emergency fund. Make sure you don’t mix your emergency fund with your other savings. Open a separate bank account dedicated to such fund. An adequate emergency fund will not only help you stay afloat during the lean months but will also protect you from borrowing money when things are tight. Resorting to debt to stay afloat is a short-term fix and will just lead to additional burden in the future. Remember you cannot solve a problem by creating another one.

Another safety net that you should consider investing on is your health insurance. Having a health insurance or health card will help you avoid a wipeout of your savings in case of hospitalization.

2. Create a budget and stick with it. Creating a monthly budget is not easy for anyone, regardless of whether you are a salaried employee or a freelancer. The challenge for freelancers is magnified due to the varying income month after month, but this should not hinder you from crafting a budget that will work for you. Start by analyzing your monthly living expenses. Categorize your expenses into two portions:

Non-discretionary expenses – these are the things that you cannot live without. The essentials that you need to survive. These are your food expenses, transportation, rent, phone bill, utilities, etc.

Discretionary – these are the things that are more controllable and can be easily reduced. These are your “wants,” such as shopping expenses, movie dates, dining out, spa treatments, etc.

Writing and breaking down these expenses can help you average out the amount that you need to set aside monthly to live. It is best if you can track the past year’s expense on each of those bills and simply divide the total amount by 12 to give you an estimate of the monthly expense. Knowing the amount gives you a baseline of how much you need to work and the money you will need to get through. Having these all written down will also help you analyze more easily which particular expense item to reduce, adjust or totally eliminate to meet your current financial standing.

3. Create two income accounts. One of the most important steps that you can take as a freelancer is to separate your business from your personal accounts. Income from your projects should go directly to your business account, transfer a portion of it into your personal account, which will serve as your personal income.

The budget that you have created will give you an idea of the regular paycheck your personal account will be receiving from your business account. Having this setup makes it easier for you to track the overall financial health of your business, both for business analysis and tax purposes.

4. Build your own “My Future Fund.” Probably one of the allures of freelancing lies on the idea of potential big money coming from a big project. Opportunities are almost limitless as you control your own pace at work.
Receiving huge money windfall can easily get you off track, especially if you’ve been working for so many years hoping to land on a big project. Do not grow emotional on your newfound wealth and splurge it all at once. Money is not infinite and you can lose it just as fast as you have gained it.

Having a specific financial goal for your future will help you get back to reality and wisely manage your windfall.

Whether the goal is to buy a new car, get that dream house built or to travel, make sure that you’d be as specific as possible and you’d want to establish a goal that truly motivates you.

Every time you get a fat paycheck, keep in mind the budget you have designed, stick with it and allocate a certain percentage that goes directly to your “My Future Fund.”


Putting your financial house in order is not optional, but rather, a necessity that should be your top priority. If you work as a freelancer, remember that you are both your own boss and employee at the same time. You’re the CEO, CFO and star employee. Taking charge of your finances is a crucial step to making your self-employment financially sustainable.

Best of luck!


Jesi Bondoc is a registered financial planner of RFP Philippines. He is the director of My Wealth MD and Partners, Inc., specializing in investment advisory. You can send your money questions at and they’ll be answered in his next article. For more info about the Registered Financial Planner program, e-mail to or text <name><e-mail> <RFP> at 0917-9689774.


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