ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Backwards Budgeting:Priority Budgeting for Freelancers and Self-Employed

Updated on September 12, 2015

Priority Budgeting

Budgeting by definition is a way to basically tell your money what to do and where to go. I love budgets as one of those silly math geeks, but when I got into freelancing several years back, everything changed. The main budget forms are not the same because I don’t know how much money I will have to budget. While in a perfect world, you will always have enough, if you want to make a budget when you don’t really know what next month brings, you need to do it differently.

So after aggravating myself doing a regular budget, I started doing what I called a priority budget each month.

First you have to put down what you do know. You have to figure out what you spend and how much each month you will need to live the style of life you want.

Common Budgeting Items

Rent

Utilities

Food

Tv/Internet

Loans

Credit Cards

Insurances

Household

Misc.

With that in mind, all your expenses laid out and accounted for on a monthly basis, then go to your annual budgeted items. For me these are car insurance and maintenance, birthdays, Christmas gifts and a vacation. That number will be divided into 12 for the year and that is how much you will have to put in fund each month to have the money when the expenses come due. Anything that is going to come up that can be foreseen, put it in the budget so there will not be expenses popping up that you have to dip into your emergency fund for. Even worse, if you don’t have the money and are left juggling what gets paid that month.

Annual Expense Budget

$500-Car Insurance and Maintenance

$300-Clothing

$500-Roadtrip/Vacay

$50-TTL & Registration (car)

$300-Christmas

$300-Birthdays

$50-Other Holidays (Halloween and Easter)

$2000-Total

Then when you have your Budget for the monthly bills and expenses, as well as your monthly allotment for your annual expenses, you have your number. Whatever that it, that is your goal for the month. While it may not go as planned each month, I like to put my budget in reverse and write it down in a way that as the money comes in, I know which priority is next on my list. Everyone’s priorities will be different and I will leave my own budget as an example.


Priority Budget

$500-Rent

$125-Utilities

$125-Internet/TV (While I need it to work, this may not be a top priority for many.)

$200-Health Insurance

$200-Food (As a freelancer, always keep a month or so of can goods, non-perishables or frozen food around. This number could be cut down tremendously if needed.)

$50-Gasoline (Once again, probably a higher priority if you commute to work, but as I am home-based it is not that big of a priority in my household.)

$50-Household (Same with household items, keeping a spare around of things you use most often, as it can help make this a zero item if needed. We all have bad months from time to time.)

$100-Misc.

$200-Annual Budget (2000/12 rounded up)

$500-Emergency Fund Savings

$2050-Total

Leftovers- 50% to Emergency Fund and 50% to purchase list


Once you have you priority budget lined up, you will then need to think about where any extra money is going to go. If you have a good month and you make an extra five hundred or so passed the budget, where do you want your money to go? I do mine as percentages, halved between extra emergency fund and a purchase list of items that I want to get.

So in this way, you know where you stand and what is paid first when that first check rolls in for the month. It also helps to have a budget in place and for a freelancer, the unknown can only be mitigated by planning ahead for a rainy month.


working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)