Freelancer Budgeting - From Rags to ReasonableBudgeting. It’s easy. There are a ton of websites that will tell you how to do it.

Just take your projected income for the month. Then categorize your expenses. Fit that income into those expenses. Hey presto… a budget.

If that’s all the information you need, great, stop reading, go get yourself some pie. You deserve pie.

But for the rest of you… you’re probably more like me…

I have no idea how much I’m going to make this month, or next month. And it’s the same for expenses. They’re crazy… all over the place. Some months I’m spending a ton, and some months, nothing.

Being a freelancer you’ve got to look at making a budget in a bit of a different way.

It’s going to be a bit different for everyone (because you’re a beautiful snowflake) but here are my own personal ironclad rules for freelancer budgeting.

Freelancer Budgeting Rule #1. It’s not income until it’s in the bankFreelancer Budgeting - From Rags to Reasonable

There is a school of thought that, even for people on a variable income, you can still project your average income for the year. Just take the last 12 months, figure out the average… or the lowest possible amount you made… and budget to that.

That may work for some people, but in my case my income in the last year has been zero some months, and many many thousands other months.

A budget is about FACTS. I do not count something as income until the money is in my hand.

I can have a gig at the end of the month, but things happen. Jobs get canceled, people get sick.

Don’t build a plan on wishes and honeysuckle. Build it on facts. Income is money that you actually have.

Freelancer Budgeting Rule #2. Every dollar has to ‘have a job’

This is a YNAB (You need a a budget… it’s a thing… check it out) rule. But I think it’s essential to freelancers. There are so many things that you need your money to do, don’t let any of it slip through the cracks.

Every dollar that comes in, has TO HAVE A ‘JOB’. Basically that means that it all needs to be applied to a category.Freelancer Budgeting - From Rags to Reasonable

That means that ALL YOUR MONEY goes through the budget.

I get into trouble with this all the time. I’ll get an unexpected 20 bucks (a good night playing poker, for example) and I’ll keep it out of my budget (because I still haven’t learned this lesson). Before I know it I’ve used that 20 bucks as an excuse to order pizza, take a cab, and buy fancy cheese. Totalling much more than 20 dollars… but the vague feeling that I have ‘extra’ money made me spend like a fool.

Money that doesn’t have a job makes your budget start to feel lazy and everything begins to lose focus.

Making sure your money is employed also helps with saving. It means that you don’t have a big pool of ‘general’ savings. Instead… you’re saving for specific projects.

Is this money for acting or singing lessons? Is this money for travel? Is this money for retirement?

That way when it comes time to spend it, you don’t have to feel like you’re robbing your retirement funds in order to pay your teacher.

Know what each dollar is for, and each dollar will end up giving you all the value it can muster.

Freelancer Budgeting Rule #3. Give yourself a break! Don’t stress about getting it right the first time

I have waited to do so many things because I felt like I wasn’t ready… or the situation wasn’t right.

I don’t really need a budget, I’ll do it when I get more money….

I’ll start budgeting at the beginning of next month so it’s cleaner in my records….

Freelancer Budgeting - From Rags to ReasonableOr *insert the excuse that you’ve been using for years to avoid budgeting*


Budgeting is going to be a hot mess for awhile. I think it must be for most people anyways, but when you’re trying to balance all the aspects of a freelancer life into it as well… it’s bound to be a straight up disaster.

You can’t skip this step. Let it be messy.

I threw out my first couple of budgets. But by doing them I learned a ton about what worked and what didn’t.

Guys. It’s personal finance. There’s no fast tracking or easy answers. Let it be messy. It’s the only way to figure things out.

But that also means that you have to extend yourself a ton of grace. If you went over budget this week/month/year…. Don’t worry about it. Every one goes over budget…. All the time. Just adjust and try again.

Freelancer Budgeting Rule #4. Base your budget in reality

Don’t build the budget that you think you’re “supposed to have.” A budget that looks like someone else’s template or the one in your head that you figure ‘grownups’ must have.

This is YOUR budget. No one else has to ever see it… so make it true.

That means that if you’re spending 1400 bucks on clothes a month, don’t leave it off just because you know that you shouldn’t. You’re spending the money. It’s part of your financial truth (whoa….that’s deep).

You will not rebuild all of your spending habits in one month. When you’re just starting out make sure that your budget is showing you where your money is actually going. And then, over time, you can start changing habits and moving money to different areas.

A budget has to be based in reality for it to be worth anything. That’s a budget that you might actually stick to, instead of one that’s just telling you to basically be a new, different, more boring person.

So get weird. Make categories for all the crazy stuff that your money goes toward: donuts, beer, toy boats, ANYTHING.

Just because adults have budgets, doesn’t mean that yours has to be boring. It’s yours, it can be just as boring as you are.

Freelancer Budgeting Rule #5. Don’t just stop at 1 Budget …. make 2

What? I don’t even have one… why do I need two.

You need to separate your business and your personal stuff… so that means separate budgets for both.

Freelancer Budget Tips

See! Two is always better than one… especially with gourds.

I used to have them combined. It works… but it’s not the best way.

Now I have them separated and it’s great. It keeps most of the variable costs over on the business side, and keeps the personal side much more stable.

It also serves one of the main ways that I deal with variable income, which you can read about HERE.

It’s an old refrain, but the more you can separate your business from your personal finances the better. It keeps clear records (good for tax times) and just makes it easier for your mind to separate the two of them.

I also think that fundamentally your business and your personal budgets serve different purposes. At least they do for me. On my personal side, my goal is to remain as frugal as possible. I want to make sure I’m living in a decent place and eating decent food… but I’m constantly looking for ways to live more simply. However on the business side I’m not looking to cut back, I’m trying to make sure money is there so that I CAN REACT TO OPPORTUNITIES  whenever they come up.

Those are my set in stone budgeting rules. They only came into being because I tried living without them… and it was just harder.

What are your budgeting rules? Or if you’re not a budgeter, what’s holding you back?