The Freelancer’s Guide to Cash Flow Management

Cash Flow Management

Freelancing isn’t just a passing trend. So many people have managed to build successful careers as freelancers and it seems like we’ll see even more individuals do so in the future. After all, there are so many reasons why being a freelancer is great – flexible working hours, working from the comfort of your home and a big paycheck. However, some of them find it difficult to manage their cash flow, mostly because the amount of money they make on a monthly basis tends to vary. That said, we came up with the freelancer’s guide to cash flow management that might be exactly what you were looking for.

Don’t ignore it

Many freelancers out there don’t like thinking about finances. This is especially the case with those who do creative work. Right brain thinkers often feel like they can’t be bothered to deal with money but it’s a fact that you need it to survive. No matter how much you love what you do, getting an appropriate paycheck is a must. Therefore, even if you don’t enjoy talking money, make sure you always ask the person or company hiring you when and how much they’ll pay you. Sort these things out as early as possible so that you can later focus on your work. Once you start doing it, you’ll realize it’s not as difficult as it can sometimes seem.

Track your expenses

In order to maintain a healthy cash flow, it’s absolutely necessary that you understand where your money is going. There’s no need to say that if you spend more than you make, you’ll soon find out there’s nothing left in your budget. To make sure this doesn’t happen, consider keeping track of your expenses. That way, you’ll know exactly what type of adjustments you need to make in your spending habits in case your workload decreases. The best thing about it is that you can download an app that allows you to create a record of every expense you make. If you’re not sure which one you should opt for, think about giving Personal Capital and Penny a go.

Know your options

Maintaining a healthy cash flow is sometimes all about how well you do in crisis situations. If your income suddenly decreases, it’s critical to know what you can do to ensure finances don’t become an issue. If you have an emergency fund (which we’ll talk about later), great. But if you don’t or you’ve already spent it, there are some other options that might help you keep your finances in order. For example, it’s good knowing that you can ask a friend or family member for a loan. Just bear in mind that disputes over money can destroy even the strongest friendships. This means that, in situations like this, finding a company which offers same day loans might be a better solution.

Recognize income patterns

As mentioned above, the paycheck freelancers receive tends to vary. It’s just the nature of the job and it’s up to you to make it work. Depending on the field you’re in, you might be able to identify the periods that might result in a decreased or increased workload. For example, if you work as a freelance writer, you can expect some bloggers to offer less freelance job opportunities during the holiday season. On the other hand, some fields may see a big increase at the beginning of a new year but the demand continues to decrease over the course the next twelve months. It’s up to you to recognize these patterns in your industry and adjust to it as much as possible.

Have an emergency fund

During high-income parts of the year, it might be a good idea to set some money aside just in case. You never know when an emergency might come up and hurt your budget or make you unable to work. When experiencing situations like this, having an emergency fund can be extremely helpful. This is especially the case with freelancers since their income isn’t as reliable as the income of those who work more traditional jobs. Most of the time, having enough to cover your expenses for three months will be more than enough but some people prefer saving even up to nine months’ worth of expenses. The best part of it is that there are so many good saving strategies you can rely on to make starting an emergency fund a real piece of cake.


Managing your cash flow as a freelancer isn’t necessarily the easiest thing to do. However, if you know what you’re doing, you should be able to ensure there’s always money in your budget, even during an emergency.

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