How To Find Financial Stability As A Freelancer


While I do love me a good gangster movie, I have to admit I was never much of a Sopranos fan when it was on the air.

Don’t get me wrong. It did have its moments, sure. But for some reason it never really grabbed me.

Funnily enough, though, as I dealt with the cataclysmic fallout of Brexit this week, I found myself thinking a lot about it; and about one scene in particular.

I believe it was a sit down of some sort, and this one mobster was complaining that, because of the economic recession, he wasn’t making as much money as he used to.

As I remember it, Tony Soprano was up in arms in characteristically hilarious fashion. He countered that this just wasn’t possible, because “certain aspects of show business and our thing have been recession-proof since time immemorial.”

Which brings me to my point.

Freelancing And Financial Stability: A Pipe Dream?

With the Pound at its lowest in 31 years and the general air of uncertainty at the moment, it’s easy to be worried if you’re a British freelancer. After all, freelancing isn’t a stable occupation at the best of times, right?

But, while financial stability is often the first objection to freelancing brought up by employed people (and, let’s face it, even some freelancers), I personally think this stems from a misunderstanding of how this lifestyle works.

Sure, your income can vary from month to month. And if you look at it from that angle, it’s true. Freelancing income isn’t steady and stable.

But with some planning ahead, it’s more than possible to achieve financial stability and live comfortably as a freelancer. Even during the lean times.

Pay Yourself A Salary

One of the first orders of business in your road to financial stability is to stop spending as much as you make.

Start by making a list of all your monthly expenses: rent, utilities, transport and groceries; and record your entertainment and other expenditure for a month. I like using Best Budget for this.

Once the first month’s over, it’s time to take an honest look at your global expenditure, and to set a feasible budget. Don’t set it too low, because it simply won’t be achievable, which will make you get frustrated and give up. But don’t set it too high either. Be realistic and live within your means.

Then comes the tricky bit. You need to stick with it.

Personally, I have two bank accounts: a business account and a personal account. I never carry the ATM card linked to my business account with me. In fact, I only ever use my business account for two things: to receive client payments and to settle business-related bills. Instead, I pay a “salary” into my personal account every month by standing order, much like an employer would do if I were in full-time employment.

While you still should have financial targets to work towards every month, this kind of approach takes a lot of unnecessary pressure off your shoulders. More importantly, it puts an end to the cycle of financial uncertainty, and gives you a stable income each month to work with.

Don’t Put All Your Eggs In One Basket

I learned the importance of this the hard way very early on in my freelance writing career. A mere three months after I started, in fact.

At that point, my clients mainly consisted of a couple entertainment blogs, the occasional once and done copywriting deal and a few other freelance writers who outsourced their overspill work (and who obviously couldn’t afford to pay me that well because they’d otherwise be left with no profit margin). Long story short, I wasn’t even making enough to cover my expenses.

Then, I landed a gig writing four blog posts a week for a marketing company. I was over the moon. My income instantly doubled. Not only was I covering my expenses, but I was actually making something extra on top of that. I had finally arrived.

This lasted for about a month or so, after which the job went away. Half my income was wiped out in one fell swoop. I was back in the red.

This experience taught me two things:

1. No Client Should Account For More Than 35% Of Your Income

As difficult as it may be, you shouldn’t have more than, say, 35% of your freelancing income coming from one source.

Depending on one client for the lion’s share of your monthly income basically puts you at that client’s mercy, which is really bad business.

The client might need a ton of work done this month, and not much work done the next. And you don’t want to find yourself chasing the client for work on slow months, do you? Not only is it undignified, it’s also unprofessional and off putting.

Besides, whether you like it or not, at some point a client will go away, at least temporarily. It’s inevitable.

You might have finished up a project and they won’t need you again for a while. Or perhaps they might decide to move everything in-house. Or maybe there’s a change in management or restructuring. Who knows?

Whatever the reason, if a client lets you go you’re not going to feel the hit as much if, at most, they make up only 35% of your income.

2. Negotiating From A Position Of Strength

One often overlooked trump card in negotiations is that you have to be prepared to walk away if necessary.

If a client is your main source of income, though, that’s just not possible. You’re going to have to kowtow and accept whatever hand you’re dealt, which is conducive neither to a healthy business relationship nor to a happy working life.

Hit Different Markets

While this is arguably a subset of not putting all your eggs in one basket, I’d say it’s important enough to merit its own sub-heading.

Especially when you’re starting out, targeting local clients can make drumming up new business easier than it would otherwise be. It’s easier to build a connection with someone if you have a location in common and can meet up in person for a quick chat every once in awhile.

At the same time, though, one of the biggest benefits of a career as a freelance creative is that geographical boundaries do not matter. You can work with anyone, wherever they are in the world. This is a powerful advantage, and you’d be remiss not to make the most of it.

You should do your best to keep a mix of local businesses and ones from further afield in your client list. That way, if the economy goes belly up in one market, you’ll have other connections you can fall back on.

How do you cope with the financial side of freelancing? Sound off in the comments below.