Personal Finance for Freelancers

Tips, tricks, and tools.

As a freelancer, you don't have an HR department to manage your insurance or retirement plan. But that doesn't mean you should ignore your personal finances.
Here's a set of tips to help you out.

The Basics

Follow these simple tips to ensure that you're taking care of your #1 employee.

  • If you don't bill, you don't get paid. Send an invoice as soon as you and your client have agreed to a job. Need help creating an invoice? Freelancers Union members get discounts at FreshBooks and Harvest Time & Billing. Or try Billable, a super easy-to-use web app.
  • Keep your personal funds separate from your business funds. Opening a checking account is super easy, and it'll save you big headaches if you keep business and personal expenses separate.
  • Set aside money for taxes throughout the year. Read our Tax Resources page for more details, but if you do nothing else, make sure you're putting some money away for taxes. Ask an accountant how much you should set aside, or assume about 30% of your income. As an independent worker, you don't have a payroll department automatically taking money out of each paycheck, so it's up to you to plan so you don't get an unpleasant surprise at tax time.
  • Plan for dry spells. Stable income as an independent worker is rarely a guarantee, so make sure you have money saved to keep you afloat. Financial planner Galia Gichon advises that you should create an emergency savings account with at least 6 months worth of savings.

Words, words, words:


{ fór-ō-wən-kā }

A long-term savings plan that allows individuals to set aside income for retirement. Because of the tax advantages offered, there are restrictions limiting when money can be withdrawn.


{ in-vois }

An itemized list of goods and/or services provided with their costs. If you don't invoice a client, you don't get paid.

Interest rate

{ in-tə-rest rāt }

The rate a borrower pays for the use of a loan. Credit card interest rates can be as high as 30%. Paying off these rates makes it tough to save for retirement.


You may be 1099 for life, but you'll still need to put something away for the future. Here's how to make sure you'll have a pot of gold at the end of your freelance rainbow.

  • Start early. Just putting aside $100 a month can turn into something big over the long haul.
  • Find an account that works for you. Freelancers Union offers a 401(k) plan for freelancers, but familiarize yourself with your options and pick the one that works best for you.
  • Make a company match. One of the big benefits of being a full-time employee is your company contributing to your retirement account. Since you won't get a match, look for a plan that allows you to contribute as an employer and an employee (such as Freelancers Union's plan) or think about keeping a few clients around in your golden years.
  • Set up automatic monthly contributions: By having your retirement contribution automatically deducted from your checking account every month, you'll never forget to save.

Pay down your debt

The easiest way to set yourself up for headaches down the road is to build up unsecured (read: credit card) debt. Here are some hints for getting it under control.

  • Make sure your interest rate is as low as possible. Paying high interest? Call the credit card company and ask if they can lower it.
  • Consolidate your debt to as few lenders as possible. If you're truly committed to paying off your debt, you can end up saving a bundle by consolidating. Check out a service like Lending Club which groups people together to invest in each other.
  • Check your credit card statements to see how much you really owe. This can be intimidating, but the first step is figuring out how much debt you actually have. Credit card companies are now required to list how much you owe and how long it'll take you to pay off the debt on each statement.
  • Look at your spending habits and come up with monthly budget that will allow you to pay down your debt.

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Other resources

Resource Center

Financial Help

Freelancer Profiles


Self-employment tax calculator: Find out how much you owe in self-employment taxes.

Online Resources

Manage all your financial accounts in one place.

Harvest Time & Billing

Track time, log expenses, and invoice clients in one place. Freelancers Union members get a discount.


Manage your time and invoices online. Freelancers Union members get a discount.

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