Financial Advice for Freelancers How and Why to Pay Yourself Regularly as a Freelancer

Author : Yuwanda Black

I’ve been a freelance writer since 1993, and get a lot of email from fellow freelance writers, primarily newbies about everything from how to find freelance writing jobs to how to estimate how much they’ll owe in taxes.

It was an email from one such newbie that inspired this article on freelance finances. She wrote in part:

“Today I got my first paycheck – they mailed it to me, so I have a tangible item I can hold in my hand and admire. It feels amazing to have your first $110 from a new business!! Thanks again for all you do – I just wanted to share my joy! A.B.”

First, paper checks are rare these days – so good for her. It’s something she can copy and frame! In case you don’t know, most freelancers are paid via PayPal these days. When I received this email, the following, still-relevant advice that I’d dispensed in an ebook years ago (“Advice from Successful Freelancers: How They Built Their Careers & How You Can Too!”) came to mind.

Freelance Business Tip: Why You Should Put Yourself on Payroll When You Freelance

Put Yourself on Payroll: And what I mean by this is, pay yourself a regular salary every week, just as if you were an employee at a company. Even if what you pay yourself is only nominal, at least you’ll know you have “something” coming at the end of the week. Paying yourself regularly serves three specific purposes.

Freelancer Tips: 3 Advantages of Putting Yourself On a Payroll Schedule as a Freelancer

1) You get accustomed to the regularity of the money. This is important because it will make you work harder to ensure that you have enough coming in to make “payroll.” This means that you’ll stick to a marketing schedule, surf the web less, let laundry go undone, etc.

In short, you’ll do what you need to do – day in and day out as a freelancer – to keep the jobs flowing.

Insider advice about how to freelance successfully: Put aside a month or two of money for your “salary” initially. Then, you can work to bring in the rest. Also, again, make your salary nominal in the beginning. Why? Because the goal is to get used to getting paid at the end of the week initially.

So if your goal is to make a full-time salary of $700 per week eventually, save enough to pay yourself at least $250-$350 for the first few months – even if you have no work coming in. Then, try to make the rest of that up as you get up and going.

2) It will make you feel more in control because you know that pay day is just around the corner.

Believe me, there’s nothing fun about Friday rolling around and having NO money coming in. If you can look forward to something at the end of the week, it’ll make even your slow times tolerable. You will also be more conscious about things like budgeting so you’ll be less likely to spend frivolously.

3) You can plan more for a “normal” existence. This means you can save more for your future, pay bills on time, do a little shopping. In short, you will be less likely to live a feast-or-famine existence as a freelancer.

Yuwanda Black has freelanced since 1993. She publishes InkwellEditorial.com, a leading site for info on how to start a freelance writing career. Learn more about how to freelance successfully, eg, how to keep more of your earnings, estimate freelance taxes — and more.