It is relaxing to think that you earn money while doing something you love with freedom and by being your boss, the only problem is finance management.
Because freelancers do not have steady paychecks like normal employees, they automatically deduct tax or employee benefits like paid leaves and sick leaves as well as bonuses. If you are a freelancer you will need to carefully plan and organize your expenses so that you will have careful control over your finances to ensure long-term success. While doing so you can consult a financial advisor in Katy, TX to get professional advice on how you can plan out properly. To get an idea of how to plan the one yourself, read this blog.
Budgeting Professionally
Since as a freelancer, your paycheck is not regular, make sure you calculate your monthly income and take the average from your last month’s earnings. Separate your fixed expenses like your rent, internet bills,s, and other maintenance costs. And keep some amount for your variable expenses like for entertainment and self-development. Because your paycheck is not a regular one or with proper order and it may fluctuate each month you must allocate a percentage of your income to savings that can help you in emergencies and even for long-term goals. You can use spreadsheets or other budgeting tools to properly manage it all.
Tax Planning
As a freelancer, you will not get the paycheck like regular employees in which taxes are paid by the boss, but you have to pay the self-employment taxes and Medicare and societal taxes too. Manage your taxes by paying your estimated tax quarterly and avoid penalties. You should not throw away your receipts for your purchases like software and other office supplies. If you also do field work for your project make sure to save travel receipts or tickets to get deduction benefits. You can work with professionals to explore ways you can save money on taxes.
Separate Your Finances
If you have a combined account for both your business and personal finances it can create confusion and will make it difficult for you to track it. Open a different account for your business where only your business-related transactions are done, that will make it convenient for you to prepare taxes and reports, it will also give you a clear insight into your business profits and will improve financial discipline. 
Save For Emergency Funds
As a freelancer, you do not have the guarantee of continuous projects, which is why you must save at least 2-3 months’ worth of expenses for your emergencies so you will be able to cover unexpected costs like medical bills or slow work period’s day-to-day expenses. Start by saving small amounts and over the period set a target of the specific percentage that you do not use at all unless it is an emergency. If you consistently save for these funds, you will not face too much of the stress of daily expenses when you have fluctuation on projects.
Track Your Invoices And Payments
Use a professional invoice tracking tool so that you will not disrupt your cash flow by delayed payments. Have a proper plan set up for clear payment terms and due dates. And make sure you quickly follow up with any overdue payment.
Save For Your Retirement
If you are a regular employee, you will not have the privilege of a retirement plan that is sponsored by employers. That is why if you are choosing a freelance career for a long time you should save money for your retirement also. We might think it is too much for you to save for that long but it will help you when you retire and also in tax deduction. You can use freelancing saving plans to ensure your retirement expenses are covered.
