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5 Finance Tips For Freelancers

Whether you’ve been freelancing for years or are new to the game, balancing your personal and business finances can seem daunting. However, it’s a pivotal component of building and maintaining a successful freelance business. Below, we’ve provided five key guidelines to help you manage your money as a freelancer.

Tip 1: Create a separate bank account

First and foremost, in order to make good financial decisions, it’s important to have a good understanding of how much money you're bringing in and how much you’re spending. Maintaining a historical view of your freelance income is key and will allow you to prepare for the year ahead, map out seasonal clients and repeat projects, and maintain a greater sense of financial stability.

It’s smart to have a separate account for your business expenses in order to track your freelance-related spendings and earnings. Additionally, online notifications can help track your business-account activity, so you know what’s happening with your account in real-time. This will allow you to have a clear understanding of which business expenses can be deducted from your tax return later on.

Tip 2: Create a budget

Budgeting can seem overwhelming as a freelancer, but it’s imperative for success, especially when income is inconsistent. A simple spreadsheet or app can be immensely helpful to track earnings and expenses. It’s a good idea to use your average monthly income as your budget, as it accounts for income fluctuations throughout the year. With that in mind, it’s important to review and modify your budget on an ongoing basis.

While an employer typically withholds taxes for its employees, freelancers must do this themselves, making it super important to stay on top of. Because you must pay taxes every quarter, it’s helpful to set aside a percentage of your earnings to make tax payments. If possible, start with your previous year’s tax return as a baseline for how much to put away. A good way to ensure you have enough money set aside is to create two separate business accounts: one for the money earned by freelancing, and the other to set a percentage of your earnings aside for quarterly tax payments. With COVID-19 impacting so many jobs and creating a lot of uncertainty for many freelancers, it’s also beneficial to create an emergency fund. Learn more about how to start an emergency fund and where to get started.

Tip 3: Save money

As a freelancer, you should always have a pool of extra money saved in the case of a late client payment, non-payment, or even a no-work situation. Furthermore, your savings should be used to select a retirement plan, such as a solo 401(k) or individual retirement account, to pay off any existing bad debt, to get insurance, and to maintain a personal emergency fund that covers around 3-6 months of your necessary expenses.

Tip 4: Set goals

Diligent and flexible goal-setting is key to successful freelancing. The 30/60/90 method is a helpful place to start. Begin by setting SMART goals for the next 90 days: smart, measurable, achievable, realistic, and time-bound goals. Then work backwards from the 90-day mark, and set goals for day 60 and day 30, ensuring that all the small, daily milestones will help you achieve the 30/60/90 day marks.

Once your goals are set, track your progress regularly and remember that goals are not set in stone. The key to successful goal-setting is the ability to adapt and optimize over time. In addition to the 30/60/90 method, it’s a good practice to review your finances frequently; checking in on a weekly, monthly, and quarterly basis in order to ensure you’re tracking to meet your goals.

Tip 5: Find an account that works for you

While the financial aspect of freelancing can seem overwhelming, an easy-to-use, flexible, and secure online bank account can help simplify and streamline your finances.

N26’s Spaces makes it easy to personalize, track, and achieve your short and long-term financial goals. With Spaces, you have the flexibility to create personalized goals to keep your various finances (personal, business, or project by project) separate, with the ability to make instant transfers as often as you like. For freelancers, this allows you to organize your expenses by the different projects you work on. When one gig is up, you can edit or delete the Space and create a new one for your next project. You can customize your Spaces to best fit your needs.

Finally, push notifications on all account activity will ensure you’re able to stay on top of all payments, withdrawals, and deposits - giving you the ability to review, modify, and optimize your finances in real time.


Open an N26 account today in just 5 minutes to experience banking that is fast, transparent, and made to fit your lifestyle. With easy-to-use money management features like spending statistics, Spaces, and the ability to tag transactions, you can stay organized to achieve your financial goals.

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

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