--- title: "Personal Finance for Freelancers: A Guide to Organizing Your Finances" description: Organizing finances can be a big challenge for freelancers. Follow our tips for freelancers on how to budget, save, and reduce finance-related anxiety. image: https://go.gatherworkspaces.com/hubfs/Scotts_Addition/170301_GatherRVA_505.jpg --- [![Gather](https://go.gatherworkspaces.com/hubfs/Gather_May2019%20Theme/Images/logo.png)](https://workatgather.com/) - Locations - Richmond - [Arts District](https://workatgather.com/location/arts-district/) - [Midlothian](https://workatgather.com/location/midlothian/) - [Scott’s Addition](https://workatgather.com/location/scotts-addition/) - [Short Pump](https://workatgather.com/location/short-pump/) - Hampton Roads - [Newport News](https://workatgather.com/location/newport-news/) - [Norfolk](https://workatgather.com/location/norfolk/) - [Virginia Beach](https://workatgather.com/location/virginia-beach/) - [Mission](https://workatgather.com/mission/) - [Pricing](https://workatgather.com/pricing/) - [Blog](https://pages.workatgather.com/blog) - [Login](https://work-at-gather.officernd.com/) - [TAKE A TOUR](https://workatgather.com/tour) ## Gather Blog # Personal Finance for Freelancers: A Guide to Organizing Your Finances Posted by [Patricia Lowe](https://go.gatherworkspaces.com/blog/author/patricia-lowe) on Oct 12, 2020 3:59:30 PM - [Tweet](https://twitter.com/share) Organizing finances is one of the biggest challenges for freelancers. As to why, freelance journalist [Jared Lindzon](https://jaredlindzon.com/) points out one glaring cause: fluctuating income. This can make it difficult to budget and save, and can even induce finance-related anxiety. That said, this instability is something you can learn to deal with, and this personal finance guide can help you do just that. ### **1. Keep track of your projects** Having a record of your projects will help you manage your financial expectations and plan for the long-term. You can start by listing each of your projects and how much you earned from them. Next, estimate your expected income moving forward, along with the hours you’ll need to invest to earn it. Doing so will give you a clearer picture as to how your earnings will fluctuate, allowing you to adjust your expenses accordingly, and save more when necessary. [![Download the Guide to Working Remotely by Gather Coworking](https://no-cache.hubspot.com/cta/default/4967400/4d810052-ea39-40a3-b403-ace1d0c2fcad.png)](https://cta-redirect.hubspot.com/cta/redirect/4967400/4d810052-ea39-40a3-b403-ace1d0c2fcad)   ### **2. Separate your personal and business finances** Having separate accounts lets you track your income and expenses easily, making all the other tips easier to follow. It'll also give you detailed records of your business-related expenses for taxes (see #5). But before opening an account, do your due diligence in finding the right business account that will suit your needs. Some things to look out for, in particular, are minimum balance and activity limitations (to avoid monthly fees) and the ability to deposit and withdraw as needed. ### **3. Create and follow a budget** Budgeting allows you to allocate funds where necessary. The first step is to track your expenses in great detail, with the end-goal of identifying where every penny is going. Next, estimate your average income monthly, which will be fairly easy once you have a record of your projects (see #1). From there, allocate accordingly. One way to do this is to use the 50-30-20 formula: 50% of your money for necessities such as utilities and food, 30% for discretionary spending, and 20% for savings (see #4). ### **4. Set aside money for savings** Saving up gives you something for emergencies and for retirement. Fortunately, there are plenty of options that can lead to financial safety in retirement. The one area you must focus on though is your savings. Aside from having a traditional savings account, financial institutions offer a variety of savings strategies that give you a higher interest rate, such as [High-Yield Savings Accounts](https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts) (HYSAs) or Certificate of Deposits (CDs). While HYSAs offer high interest rates that you can withdraw anytime, CDs have set maturity dates, which means that while your funds will be locked until a certain time, you will likely get a higher interest rate. You can take advantage of this by building a CD ladder, where you spread your money across multiple CDs with different maturity dates. In this way, you're not only saving money, but are also growing your savings in the long-term. ### **5. Don't forget your taxes** Freelancers like you are [categorized as self-employed](https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee), which means you still have to pay taxes — otherwise the taxman will come after you (0.5% for each month of unpaid taxes). A good practice in this case is to file quarterly, using your per-quarter income in the previous year as the basis (or your estimates based on #1). Make sure, too, that you itemize possible deductibles, like office expenses, business-related food, and licensing and certification costs. Doing so will be easy if you have a business account and have been tracking everything in detail. Now that you know the key things to do to organize your finances, the next step is to optimize productivity by working with the end-goal in mind and breaking down a project into bite-sized chunks. [Increased productivity](https://go.gatherworkspaces.com/blog/five-reasons-to-work-from-gather-rather-than-working-from-home), in turn, will allow you to take on more projects, and add more to your finances in the process. [![Take a Tour](https://no-cache.hubspot.com/cta/default/4967400/6afa2bec-ac27-4b73-96e8-8a306bc9d98e.png)](https://cta-redirect.hubspot.com/cta/redirect/4967400/6afa2bec-ac27-4b73-96e8-8a306bc9d98e) Topics: [Business Corner](https://go.gatherworkspaces.com/blog/tag/business-corner), [Freelancing](https://go.gatherworkspaces.com/blog/tag/freelancing), [Finance](https://go.gatherworkspaces.com/blog/tag/finance) ## We believe. Coworking is more than coffee and connected space. It's the people. It's the possibilities. It's about your productivity, your goals, your future.   ## It's time to belong here. Think here. Create here. Flourish here. Surround yourself with opportunity. 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