5 Tips to Save Money as a Freelancer

Working as a freelancer can offer a gratifying array of perks. You get to set your own schedule and work from anywhere in the world as long as you have access to the Internet.

On the other hand, you may incur various costs. Most likely you’ll have to pay for your own equipment, software, travel, and other office expenses.

We’ve collected a list of helpful money-saving tips that should enable you to save money as a freelancer.

  1. Tax Write-Offs

The biggest thing that sets a freelancer apart from a staff employee is the way you’ll file your taxes. Typically, a full-time worker will have taxes taken out of the paycheck every pay period. He or she will also receive a W-2 at year’s end.

A freelancer is regarded as an independent contractor. This means no taxes are removed when you receive your payments.

Often, a client firm will offer you a 1099-MISC form. But that doesn’t mean you aren’t expected to report your earnings to the IRS: You’ll have to report your earnings on a 1099-NEC or 1099-K form.

The advantage of these forms is that you may write off various expenses that relate to your work. Some might include, but are not limited to:

  • Home office expenses
  • Advertising
  • Office supplies
  • Business startup costs
  • Meals
  • Travel expenses

It’s your responsibility as a freelancer to operate as your own accountant. You must keep track of every expense that can be directly tied to your work activities.

Be careful not to write off personal expenses, though. For example, if you took a business trip for work, you could write off the use of a private car service, but you are not allowed to deduct airfare from a vacation you take with your friends.

When you’re a freelancer, you should consult an accountant or tax professional to make sure you’re on the right path during tax season.

  1. Separate Personal From Business Bank Accounts

One of the advantages for freelancers is that their business expenses are usually fairly low. That doesn’t mean you may neglect your financial infrastructure. Most freelancers engage with multiple clients or businesses, which means they have multiple payment methods to keep track of.

When people start out freelancing, they often commit the mistake of failing to establish a separate business account. Instead, they let their free-lance income flow into their personal account, which inevitably leads to blurred lines.

You ought to set up different bank accounts for your personal and business finances. Then set up payment methods through Paypal or Venmo, as well as autopay to tie directly to your business account.

Once you’ve done that, you can pay yourself into your personal account and you’ll always know how much remains to cover business expenses.

  1. Track Your Income-to-Expenses Ratio

The key to saving money is to create and maintain a budget. Tracking your income-to-expense ratio will ensure you don’t overspend.

What makes the process challenging for freelancers is that your income probably won’t be consistent. You can track your income-to-expense ratio by:

  • Keeping a log of your invoices and payments
  • Tracking each of your monthly costs
  • Setting aside 30% of your monthly income into savings for tax purposes
  • Calculating a portion of leftover funds to deposit into savings
  1. Automatic Savings Transfer

This method of saving is effective and simple to do. Most banks offer automatic savings transfers, but because your income will fluctuate, you may be unsure how much is reasonable to transfer each month.

Setting up even a small amount such as $50 a week or $200 on the fifth of the month can make an amazing difference over time. It’s money that goes out of sight and out of mind.

The most important thing is to be consistent. Auto-transfer empowers you to set up the same day and amount every time so you never have to think about it.

  1. Adjust Your Lifestyle

If you find yourself spending more money than you’re making, only one of two things can remedy the matter. You either have to make more money or spend less.

If your expenses are more than your income, it’s probably time to reevaluate your lifestyle. Take a look at your budget and try to detect where you’re spending most of your money.

You may need to go out less and cook more often at home. You may be spending extra money on monthly subscriptions you don’t use, and that’s money going out the window.

Perhaps you don’t need to buy a new laptop right now. That can wait a few months if your current one is in decent condition.


Freelancers are essentially business owners. They’re responsible for handling all the finances and accounting for their contracted work.

If you want to save money on a relatively flexible payment schedule, you’ll have to get serious about your budgeting.

Always keep your personal and business finances separate. Treat yourself as an employee and pay yourself each month.

Most important, set up a budget so you can keep track of everything. When in doubt, work with a professional accountant or tax professional who can provide expert guidance.