Introduction
If you are a freelancer, you probably already know that budgeting can be a huge challenge. It's easy to have no idea where your money goes, and it's even easier to think that "it doesn't matter." At the same time, if you want to be successful as a freelancer — or just keep from going broke — then budgeting is essential. This article will give you some practical tips for creating a budget that works for your unique situation as well as provide resources for getting started with creating one in the first place.
Start with your income.
Before you can begin to plan, the first thing you need to do is figure out how much money you're going to make. The good news is that this step is pretty easy--if not automatic--if you're working as a freelancer (or even if not).
Start with your income: Whether it's hourly or project-based, every freelancer should keep track of their earnings as they go along so that they know exactly how much money they've earned at any given point in time. This will help them budget better because instead of just trying to guess how much work they'll get done over the course of a month or year, they'll have actual numbers from which to base those guesses on.
Importance of knowing what you will be earning: It might seem obvious for someone who works for themselves but often times people underestimate their own abilities and potential earnings by failing to take into account things like bonuses or raises that may happen down the road when working towards promotion within an organization--or simply because someone else has left them room behind where more work could potentially come through!
What about my tax return?
When you file your tax return, the government will either pay you or owe you money. This is called a tax refund--it's the difference between how much tax they think they should have collected from you and what they actually did collect.
In other words: if you paid more than 100% of what was due on your earnings during the year (because of things like withholding), then when it comes time to file taxes at year end, there's going to be some money left over for them after all is said and done. That extra amount goes into an account with a special name: "overpayment." You can use this money however suits your needs best--whether that means saving it up for next year's taxes or spending it on something fun like new shoes!
What about the expenses I can't control?
There are some expenses that freelancers can't control, and those are the ones that will make or break your budget. Your rent or mortgage payment is going to be the same no matter what; it's a fixed amount that you owe each month. Utilities like electricity, gas and internet aren't usually dependent on how much work you do in any given week (though they might fluctuate with the seasons). Food costs are similar: they're determined by what kind of grocery store you go to (how much markup they put on their products) as well as where in town they're located--and whether or not there's a grocery store nearby at all!
Transportation costs can change depending on whether or not your commute involves public transit versus driving yourself every day; insurance may go up if anything happens during the year that requires additional coverage; phone bills tend toward being higher than average due to data usage requirements for many jobs these days (and those aren't always optional); internet access might increase due to increased usage from working from home rather than having office space where everything's provided free-of-charge...and student loans? Child support payments? Those types of things shouldn't factor into our budgets because we don't want them affecting our financial health overall!
How do I decrease my expenses?
Look for ways to save money.
Make a list of all your expenses, then try to find ways to reduce them.
Try to cut down on your spending by doing things like:
buying in bulk (if you have space) or making bulk purchases online;
using coupons and cashback sites;
making the most of out-of-date food with recipes like this one from The Kitchn!
What about my debt?
In addition to your business expenses, you should also be paying off any personal debt. This includes your credit cards, student loans, mortgage and car loan--any debt that has an interest rate higher than 5% or so. It's important to pay these off first because the money you're putting towards them is basically an investment in yourself that will continue paying dividends for years (or even decades) after you've made your last payment on them.
When it comes time for budgeting for success as a freelancer or small business owner who wants to grow their business into something bigger one day soon--or maybe now!--the key is prioritizing where you put your money so that it goes toward things that are going help make sure everything else stays afloat while still leaving room for growth down the road
Should I get insurance?
As a freelancer, you probably don't have the same kind of benefits that someone who works for an employer does. However, insurance is important for everyone and can help protect your bottom line if something goes wrong.
Here are some types of insurance that are especially important for freelancers:
Health insurance: If you're self-employed and have no health coverage through your employer (or family member), then it's up to you to find some way to get covered--and fast! There are many options out there; however, they're not all created equal--and some can be downright expensive. Make sure the company or policy provides adequate coverage at a reasonable price before signing up with them.
If you want to be successful as a freelancer, budgeting is essential.
If you want to be successful as a freelancer, budgeting is essential. Budgeting helps you make sure you have enough money to cover your expenses and save for the future. It also helps you make smart financial decisions so that your business can grow in a healthy way.
Budgeting is simply planning for the future by setting aside money each month for specific goals like paying bills or investing in equipment or software upgrades that will help improve productivity (and hence income).
Conclusion
Hopefully, this article has given you some practical tips on how to budget for your freelance business. I know that it can be difficult to get started with budgeting and staying on track with it, but the benefits are worth it! By keeping track of all your expenses and income in one place, you'll have a better idea of where your money goes each month and what adjustments could be made if necessary. Plus, if something unexpected happens like an illness or car accident then having insurance coverage means that at least some of those expenses won't fall onto your shoulders alone (or cause them more stress than necessary).
