Save Money

9 Smart Ways to Save Money As a Freelancer

Are you are a freelancer like me? Are you struggling to save money? May be I can help you in this by giving you some ideas on how to save money if you are a freelancer.

As a freelancer, it is important to save money where you can. This is because you never know when work will dry up and you will need to have a cushion to fall back on.

In this article I’ll go over different methods of saving money as a freelancer so that you can maximize your profits and put more money back into your pockets.

While it may seem like freelancers have a lot of freedom but if you see their finances, the truth is it can be very hard for them to save money.

In addition, freelancers often have to pay for their own health insurance and retirement savings. It is important to be aware of these challenges and to make a plan for how you will save for the future if you are a freelancer.

The best thing about being a freelancer is you have full control over your work. How many hours you will work? How many projects you will take? What is your target monthly income?

You can decide everything. But also, you have to mentally prepare when you won’t earn any money.

I have been freelancing for 5 years now, and I can say, with the perks comes some serious disadvantages too. There are months when I can save hardly any money.

But by being mindful of their spending, budgeting, and income, freelancers can make saving money a priority.

freelancer photo of a man

Definition of a freelancer

Talking about a freelancer and how an individual who is a freelancer can save money depends on several factors. How much do they earn per project, how frequently do they work and what is the status of their work.

Before discussing further on the money part, let’s know what is freelancing or who are freelancers.

A freelancer is an individual who works independently and is not bound by a contract to any one employer. 

As a freelancer, you are self-employed and can work for yourself or for multiple clients. You are responsible for managing your own time, setting your own rates, and handling all of the administrative aspects of running a business. 

At its core, freelancing is about being your own boss and having the freedom to choose your own projects, clients, and work hours. This flexibility is one of the primary appeals of freelancing also comes with some major challenges.

Importance of saving money for freelancers

I have been working as a freelancer for 6 years and I could very well explain why there is a need to save money when you are a freelancer.

Freelancers doesn’t get paid every month throughout the year. You never know when a project will dry up. You will need to have savings to cover your expenses.

The inconsistent nature of freelance work can make it difficult to know how much money you will be making every month. If you have a couple of projects in hand, you could make a decent figure for months. Not every time you will have as many projects, it is then you will be needing your saved up money to cover your expenses.

Having a healthy savings account can help provide a sense of security. Freelancers don’t have the luxury of employer provided benefits like health insurance, provident fund and retirement programs. If you prioritize saving money as much as possible when you will have the flow of cash, it will protect you financially during the money crisis.

Also, saving money gives you peace of mind and allows you to focus on your work, rather than worrying about your finances. 

You can also set aside a certain percentage of each payment you receive into your savings account. For example, if you receive a $500 payment, you could automatically transfer $50 into your savings account. This will help you build up your savings over time without having to think about it. Regardless of how you choose to save, the important thing is to start today. 

How to save money if you are a freelancer

There are a few things you can do to save money as a freelancer.

Get Organized

One of the best ways to save money as a freelancer is to get organized. This means having a system in place for tracking your expenses, invoices, and payments.

When you’re organized, it will help you track your expenses and make informed decisions about where to spend your money. You’re also less likely to miss deadlines and incur late fees.

Keep your files and paperwork organized, you will save time and money both. Thus, if you’re looking to save money as a freelancer, getting organized should be at the top of your list. It will help fulfilling your goal of saving money, so you can invest in building asset and live a comfortable lifestyle.

Set Financial Goals

I have discussed in one of my articles on “how to set financial goals.” Here, since we are talking about how can a freelancer can save money and to do that, it is important to set financial goals. As it will provide you with a sense of direction and purpose for your business, also to secure your finances.

Before you start as a freelancer, I am sure you already did your research and knew the setbacks. To secure your savings, you must have specific and realistic financial goals.

For example, instead of setting a wide financial goal like “increase your income,” set a specific goal say “increase your income by 10% or increase your saving by 10% more.” This will help you tracking your progress and motivate you to focus on your work better.

Break down your goals into smaller and manageable tasks that you can work out each month.

Define your long and short-term financial goals. Include your retirement planning, loan repayment in your long-term goal and saving for a specific purchase, creating an emergency fund and investing on something should be there on your short-term goal.

Set a Budget

Are you a freelancer? Are you in charge of your finances?

Setting a budget is always the best way to save money.

It will help you keep track of your income and expenses. You can see where your money is going. It will also help you make smarter financial decision. You can start evaluating your spending habits.

Overall, budgeting should be always your first move if you want to save money.

budget for freelancer

Build an emergency fund

As a freelancer, you are always at risk of experiencing an unexpected financial emergency. This could be anything from a medical emergency to a last-minute project cancellation.

Having an emergency fund in place can help you cover these unexpected costs and avoid going into debt.

Also, it will give you peace of mind and can help you weather unexpected financial hardships.

You can start saving up for an emergency fund as early as possible.

emergency fund

Invest in yourself

As a freelancer, one of the best things you can do for your career is to invest in yourself.

Take time improving your skills and knowledge, you can actually save yourself a lot of money in the long run.

While it may seem like investing in yourself is a costly endeavor, but this is an essential thing to do.

By honing your skills and expanding your network, you can find better-paying clients and projects.

Also, having a good quality setup will help you work more efficiently and avoid costly mistakes. You can take courses and workshops to improve your skills, attending networking events, or even just investing in a good quality computer and software.

Thus, if you’re looking to save money as a freelancer, investing in yourself is a great place to start.

invest to save money is you are a freelancer

Maximize Your Income

As a freelancer, it can be challenging to maximise your income while maintaining a healthy work-life balance. If you have the skill, resource and the right network, it’s possible to increase your income without burning out.

Networking is key. Connect with fellow professionals online, and make sure your portfolio and contact information are up-to-date. By keeping your pipeline full of potential opportunities, you will be in a much better position to negotiate higher rates and earn more money.

Specialising in a particular field can help you become an expert, leading to get more demand for your services. Thus, identify your area of interest and build your expertise, and position yourself as an authority in your niche.

If you have existing clients, offer additional services or products that complement your existing offers. For example, if you are a designer, you could offer website design services in discount to your existing clients. This is to ensure they maintain their trust in you and continue to give you opportunities for the future.

To maximise your income, you must diversify your income streams. Create more digital products or courses, sell your niche expertise through consulting and coaching. These are some of the ways that can help you generate additional income and reduce your sole dependency on client work.

Research on the going rates for your services

One of the biggest challenges facing freelancers is to find a way to charge what they’re worth without underselling themselves.

Researching will help you know if you are being charged a fair price. If you charge too little, you’ll end up making less money overall. But if you charge too much, you might not get any clients at all.

As a freelancer, I too face this issue. Thus, to get a better idea of what others are charging in your industry, you can negotiate with the clients well.

You can either start by searching online for industry averages. You can also talk to other freelancers in your field to get their opinions on what they charge.

Thus, research and save money.

Optimize Your Tax Strategy as a freelancer to save money

One of the best ways to optimize your tax strategy as a freelancer is to make sure you are taking advantage of all the deductions and credits available to you. You may be eligible for various deductions that can lower your tax liability. Freelancers can also contribute to various types of retirement accounts, such as Solo 401 (k), SEP IRA. They are tax deductible and can help you save money for the future.

While it is nearly impossible to know everything about taxation. Thus, working with a professional can help you optimise your tax strategy and identify additional tax-saving opportunities.

save money as a freelancer

Track your buying impulses

It’s important to be mindful of your spending. You are your own boss in your profession and you need to be careful with your money in order to stay afloat.

One way to help control your spending is by tracking your buying impulses.

Whenever you feel the urge to buy something, take a step back and ask yourself if you really need it? If it’s something you want, is it something you can live without?

Learn to control your spending and save money as a freelancer.

Last words –

Thus, if you are a freelancer like me, certainly saving money will be difficult but not impossible. Learn your ways to save money while enjoying the freedom of working as a freelancer.


How much money should I save as a freelancer?

How much money you should save as a freelancer depends on your individual financial situation and goals. There are a few factors to consider when determining how much should you save.

For example, calculate your expenses, income, goals and every other expense. If you have more costs monthly, you must save relatively high to ensure your emergency fund can cover everything. However, it’s always a good idea to aim for a savings of at least 20% to 30% of your income to prepare for any unexpected expenses.

How can you save for retirement as a freelancer?

As a freelancer, you have the unique opportunity to control your own retirement savings. Unlike traditional employees, who often have access to employer-sponsored retirement plans, you must proactively save for retirement on your own. There are several steps you can take to save for retirement as a freelancer:

Open a Solo 401 (k) account – It is a retirement plan specifically designed for self-employed individuals or small business owners.

SEP IRA – It is a simplified Employee Pension IRA is another retirement plan option available to self-employed individuals.

IRA account – It is an individual retirement account which is a retirement savings plan available to freelancers. There are tax benefits in an IRA account.

How do I balance saving money by investing in my business?

As a freelancer, it is important to find the right balance between saving money and investing in your business.
Prioritize your spending. Before you spend money, take a step back and assess what your priorities are. What do you need to spend money on in order to keep your business running? What can you cut back on? Once you understand your priorities, you can start allocating your funds accordingly. 

While deciding where to invest in your business, focus on areas that will generate growth and profitability.
For example, if you are investing in marketing your new product to penetrate the market and generate awareness and leads, it is worth giving a shot. Eventually you will get your money back in terms of profit from your new product.

Lastly, one of the best ways to keep track of your spending is to create a budget for your business expenses. You can not spend all your savings while investing in your business. Thus, plan, analyse, budget, and stick to it.

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