5 Money Tips for a Freelancer

I've been freelancing for the past 2 years. I quit my 9 to 5 job as a lawyer while taking care of my newborn baby. Freelancing has given me the maternity time that I need and it also gives me a fresh and new routine after I spent 5 years working non-stop. As an introvert, freelancing also released me from the soul-sucking corporate dramas and people.

Despite all the upside of freelancing, one thing that I miss is the stability of my income and other benefits that comes from my employer. I didn't have to worry about my health insurance then, as it was fully covered including dental and optics. I also got a retirement plan that benefits me.

Doing freelancing while also become a new mom has made me realized that I really have to be careful with my money. Among many things, here are five money management tips that I personally believe in as a freelancer:

1. Identifying Primary Expenses

The first thing I do before I received my paycheck is making a very tiny list of expenses. This expense budget only consists of the absolute primary needs. I also put the exact date of when these expenses need to be paid. Because being late on payments like mortgage might cost me a few bucks and as a freelancer even those few bucks matter.

2. Be Strict Between Needs And Wants

Everyone is having a hard time distinguishing between their needs and wants. It's really hard that sometimes I put some things into the "grey" area, which means they're both needs and wants. So when my income is hitting a high number and it covered all my needs, I allowed myself to indulge in some reasonable things in the grey area.

Most likely I put a lot of wants into needs and it made my expenses blow up. So I prefer to minimize my needs as much as I can.

As a freelancer, it's really important to have self-control over unnecessary things. Because we don't know when the next paycheck will come up.

3. Practice Self Control Every-Single-Day

This might be the toughest one on the list. There are certain times as a freelancer where we receive a lot of offer and everything just works perfectly. While we're busy doing our job we tend to get focus and put all our energy and time towards our work. After that, we tend to reward ourselves.

A self-reward is important for my mental health. I mean.....what's good about money if we can't enjoy some of it. But this self-reward trap is actually very consuming. These are times when we have to remember that as a freelancer, there is no guarantee that we will be able to pay our next bills or health insurance.

Practicing financial awareness is easier where you're not trapped into some social expenses. Thankfully as an introvert and freelancer, I enjoy my alone time at home rather than dining out or going out to the bar.

Another thing that also help me stay frugal is with watching some finance gurus on youtube (like Graham Stephens) and listening to podcasts that will remind me of my financial goal.

4. There is No Limit On The Emergency Fund

Eventually, every freelancer will face some bad day, week, month, or even year (knock on wood). The uncertainty of the income is making the amount of the emergency fund needed by a freelancer is much higher than an average salaryman.

While most people set how much of the emergency fund they need based on their monthly expenses, I personally think it doesn't work that way for a freelancer. I prefer to set out the maximum amount of my expenses monthly while putting the rest into saving and investment.

Even though I already fulfilled the standard amount of emergency fund I needed for my family last year, I still live frugally and put almost everything to saving. This way, I could be more relaxed in facing the uncertainty ahead of me.

5. There is No Room For a FOMO Trend

As an introvert and a new mom, most of the spare time I have is spent on some quality time for myself and my husband. We actually and literally have no room for any FOMO (Fear Of Missing Out) trend or any other trend going on in the social media.

This might be not the case for every freelancer out there. As calming as it sounds, being a freelancer might be hard for some extrovert souls that need lots of human interaction. Being socially distant could result in loneliness and even depression to some. While keeping mental health and social relation is very important, we still need to always keep in mind that having no money also leads to depression and other more important issues, so we always need to practice self-control on following the current trend and focus on our financial goals.