10 Things I’ve Learnt About Money as a Freelancer

In 2003, I took the life-changing step of turning my hobby into a career. It was exciting and completely nerve-wracking! Many freelancers eventually go back to a job, but 13 years later I’m a little older, a little wiser, and still loving the work I get to do. Here are a few things I’ve learnt about money as a freelancer:

1. Put money away for tax

There are few things more depressing than receiving your tax bill, only to realise you don’t have the money to pay it off by the deadline. This was particularly problematic for me because most of my corporate clients require that I send them my tax clearance certificate in order to pay me.

That meant that if I didn’t pay my tax in time, not only could I get fined but I’d find it even more difficult to generate the money to pay the account.

And unlike someone who’s employed, I don’t have someone to pay my tax automatically on my behalf.

The trick to preventing this is to have a separate savings account where I keep the money to pay my income tax when the bill arrives. When a client payment arrives, I immediately put 20% of it into my tax savings account, despite the temptation to spend it all. When my tax bill arrives, I have the money ready to transfer and any surplus immediately becomes a ‘surprise 13th cheque’ that I can use to spend as I like (or, even better, pay off a debt).

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