How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals

How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals

Athena Valentine Lent
September 12, 2023
March 10, 2023
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Reviewed by
Isaiah McCoy, CPA
Tax guide
How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals
Athena Valentine Lent
September 12, 2023
March 10, 2023
Icon check
Reviewed by
Isaiah McCoy, CPA

Budgeting as a freelancer or gig economy worker can be tricky, but it’s not impossible. You can  simultaneously hit your financial goals while paying your bills. I’ll show you how. 

How do I know? Because I’ve done it myself. After freelancing as a side gig for five years, I decided to jump into it full-time, leaving my full-time job at a nonprofit. I was excited to start bringing in more cash: my non-profit salary wasn’t too lucrative.

My side hustle — writing personal finance articles — made me a budget expert, so I already knew the struggles that come with freelancing. But like anything else, it’s entirely different when you experience them firsthand. I may or may not have cried the first two times I experienced an insane cash flow problem. 

Working for yourself can spike your anxiety and be full of ups and downs. But you can make it work as a freelancer if you learn how to budget.


Step #1: Figure out your expenses — for you and your business 

A budget is a spending plan based on your expenses and income. But after spending the past year writing about budgets (my first book, “Budgeting For Dummies,” was publishedMay 9, 2023), I can tell you there’s way more to it than that.

Budgeting can also help you accomplish goals, like buying a house as a freelancer, upgrading your apartment, or taking a trip you’ve always dreamed about. The first step to getting there is gathering your expenses for the past month. These can be categorized into fixed and variable:

  • Fixed expenses: Stay the same each month, like rent or car insurance
  • Variable expenses: Can fluctuate from month to month, like groceries and gas 

Optimize your business budget

Once you’ve organized your personal expenses, tackle the costs associated with freelancing. These fees are necessary to keep your business up and running, which means you can write them off on your taxes.

To make sure you’re not missing a possible deduction, use Keeper. Our app scans your bank or credit card account for purchases you made for business-related reasons, then writes them off for you. You won’t be left wondering what can be written off — you can sleep soundly knowing you’re getting back the maximum amount at tax time.


Different businesses come with different costs

If you're doing project management, or freelance creative work like writing or graphic design, you’ll most likely have regular, recurring costs for software and invoicing.

I also include expenses like these in my business budget:

  • 📱My cell phone
  • 🌐 My internet bill
  • 💻 Google Workspace, Grammarly, Later, and other apps I use to run my business. 
  • 📝 Office supplies 

With anything that’s split across your business and personal budgets — like a cell phone — you can take a partial write-off. That’s based on the amount of time you use it for work.

Depending on your job, you may not have recurring software fees, but there are other items you shouldn’t forget to account for. Take Shonnita Leslie, host of the personal finance YouTube channel Noir In Color. Outside of her 9-to-5, she delivers food for DoorDash and Uber Eats, and her gig work has helped her to pay off over $50,000 in debt. 

“Add up gas for gig work, and then the gas you’ll need to drive for other purposes, such as running errands,” Leslie says. (You’ll have to account for both in your budget, but only the gas you spend on gig work is a write-off.)


Remember the less-obvious business expenses

Other items you may not immediately think to factor in — but still spend money on — are supplies that help you perform your gig duties comfortably. Don’t forget about those!

“Masks, hand sanitizer, and T-shirts you can order from the company are all items that can help keep you safe and identifiable [on the job],” Leslie says. 

Other items she includes in her business budget are:

  • 🎒 Bags to keep food hot or cold
  • 🚘 Organizers for your car
  • 🛞 A wagon for delivering items, such as groceries   

Cut down on unnecessary business spending

While going over business costs, take time to see if there is anything you can cut before moving forward.

“Cutting down on unnecessary software and services will always help increase cash flow,” says Mykail James, MBA, a personal finance educator who creates content as The Boujie Budgeter on social media. She suggests doing a purge to eliminate unused subscriptions to help you clear up room in your budget. 

Don’t buy things for your business just for the write-off

Another way to cut down on unnecessary business costs: be mindful of items you’re buying “just because” they’re considered a write-off.

A common misconception about write-offs is that they’re free, when they’re not. They’re more like a discount.

Write-offs lower your taxable income, leading to more tax savings — but they don’t directly lower your tax bill itself. In other words, a $500 write-off doesn’t mean your tax bill will be $500 smaller. It means you’ll be taxed on $500 less.

Buy something just for the tax break, and in the end, you’re losing out and stuck with extra junk. 

Step #2: Assess your monthly cash flow 

Getting paid as a freelancer or gig worker differs from working a 9-to-5. With a 9-to-5, you’re paid regularly and on time.

Being your own boss comes with perks, but having a consistent paycheck regularly isn’t one of them. That means you’re budgeting with irregular income. 

Budget with your lows in mind

Leslie, the finance YouTuber and delivery driver, suggests basing your budget on your lowest monthly earnings. A way to do this is to look over the past year to see what month you earned the least. Just to be safe, assume you’ll only make that much every month.

Another option I like is:

  1. Adding up the amount I’ve brought in over the past six months
  2. Dividing it by six

This gives me a baseline of what I can expect to see in my checking account. 

Make a plan to cover shortfalls

If your projected income won’t cover the expenses you found in step #1, brainstorm a few ideas to help you cover the gap.

If you’re doing gig work, double down on the days when peak pay or bonuses are on the table. Leslie also keeps track of higher-performing days to plan her schedule accordingly. 

Step #3: Learn how to handle your taxes

An essential part of budgeting as a freelancer is putting money aside for taxes. Since it’s not an automatic deduction from your paycheck, it’s easy to forget. Plus, you'll have to deal with self-employment tax — essentially a higher tax for Social Security and Medicare paid by self-employed people.

Taking a proactive approach to paying taxes is critical, since you’ll have to sock away enough money to cover them.

Set aside around 30% of your income for taxes depending on how much you earn. To get more accurate figures, you can use our freelance tax bill calculator, which will figure out your tax bracket and give you a custom estimate based on your earnings.

Watch out for common 1099 tax mistakes

One mistake freelancers make when filing their taxes is failing to have adequate income and expense documentation — something the Keeper app can help with through its automatic write-off detection.


“Not having proper bookkeeping will result in missing business expenses that [would otherwise] reduce their tax burden,” says Sonia Castelan, a first-gen, Latinx tax accountant and founder of Castelan Tax Services. 

Another mistake she sees frequently is independent contractors not reporting all of their 1099 forms on their tax returns. “Freelancers who have filled out a Form W-9 and were paid in cash, check, or via Zelle should double-check their records to ensure they received a 1099-NEC from the payer.” (Payment apps other than Zelle, including PayPal and Venmo, will instead send 1099-Ks.)

Get into a routine with your freelance finances

“Don't be afraid to DIY and learn the basics of bookkeeping,” advises James, the personal finance coach and content creator. An organized system to track your income and expenses will help ease tension regarding your finances.  

James stresses that keeping your budget simple can be the best strategy for ensuring you’re paying yourself fairly and can prove your income when it’s time to file taxes. 

Take advantage of tax breaks

Another way to reduce the amount you pay in taxes is to know what business expenses are considered tax write-offs. According to Castelan, you can write off expenses like:

  • 🚰 Part of your utilities (if you work from home)
  • 💽 The software you use in your day-to-day business
  • ✈️ Travel expenses to attend events or meetings
  • 🏫 Classes to advance a skill or pursue further accreditation in your field

Of course, these are the same business expenses you accounted for back in step #1.

As a self-employed individual, you can also take advantage of retirement plans like traditional IRAs, SEP IRAs, and solo 401(k)s. What you put into these plans will decrease the amount of money you pay income tax on, ultimately lowering your tax bill.

You can take a similar income adjustment for your health insurance. Take a look at this list of common freelancer tax deductions for more ideas. (You’ll also find an interactive tool that can help you find write-offs based on your job!)

Step #4: Organize your expenses into categories

After you’re done reviewing your spending and putting aside money for taxes, make it easy on yourself by splitting your expenses into categories. When you’re starting out, this can be as simple as for “business” and another for “personal.” But as you get further into your career, you might have to add more categories.

In my case, I originally started writing as a side hustle. I kept my expenses minimal and placed them into my “business” category, with an allocated amount of $50. 

The minute I went full-time, my business costs rapidly increased. My predetermined business budget of $50 couldn’t cover things I suddenly needed, like:

  • 🤝 A premium LinkedIn membership
  • 🖥️ Website management services
  • 👩‍💻 A virtual assistant

To help keep my expenses organized for both budgeting and tax purposes, I opened a business checking account for my new expenses. Separating them out helped me create a new business budget, with subcategories for different types of work expenses.

Now, all I have to do is open my Keeper account — which automatically categorizes those expenses — to see where I’m at.


Step #5: Find a budgeting method that works for you

Once you have your categories, and you know how much money you have to work with, it’s time to try a budgeting method.

I recommend choosing one of four budgeting methods. Each has pros and cons. For simplicity, I’ll apply each of them to a monthly income of $3,500.

Budgeting Method Pros Cons
Zero-based budgeting Easy to see where your money goes Takes lots of commitment
50/30/20 Flexible Can be hard in an expensive area
Cash envelopes Hard to overspend Makes you scramble if you do overspend
Pay-Yourself-First Low-effort way to hit your goals Can make it slow to save up

Zero-based budgeting

Pros: Easy to see where your money is going, so that you know where to cut back

Cons: Takes a lot more commitment than other budgeting methods

Zero-based budgeting helps you allocate every dollar you bring home, so you can maximize how you’re using your income. It encourages you to put money aside for your goals and extra debt repayment.

Here’s how it works: After categorizing your expenses, you set aside a dollar amount to cover each category — justifying how much you’re allocating per category. Then, you apply the extra cash to whatever you want. That could be debt repayment, a much-needed vacation, or the beginnings of a retirement fund.

Assign both your variable and fixed expenses to a category with a predetermined amount. For example, if you spend $245 on groceries and $100 on eating out, you could cover both expenses by allocating $400 to your “food” category. 

Example: On an income of $3,500

Based on an income of $3,500 and expenses that total $2,500, you would have $1,000 to put toward your future. That’s how zero-based budgeting keeps you on track, by ensuring your money works for you, no matter what.


Pros: More flexible than other methods — while making sure you still spend reasonably.

Cons: Can be hard to work with in a higher cost-of-living area

Popularized by Senator Elizabeth Warren, the 50/30/20 budget keeps you on track without overwhelming you. It goes like this: 

  • 50% needs: Both fixed and variable, like your rent and groceries
  • 30% wants: Stuff like entertainment and memberships
  • 20% savings: Any financial goals, like saving for a down payment for a house or throwing extra money on top of your student loan debt

This method can be a lot easier than zero-based budgeting. Instead of numerous categories, you’ll only worry about three and have much more spending freedom.

Example: On an income of $3,500

For this budgeting method to work with an income of $3,500, your needs need to be under $1,750. That gives you $1,050 to spend on your wants and put $600 towards savings. 

Cash envelopes 

Pros: Making money tangible can lead you to be less tempted to part with your cash

Cons: Hard to cover things if you overspend the cash in your envelope without having to move money around 

If you love the idea of zero-based budgeting but have less wiggle room if your spending goes over, cash envelopes could be the better option. With this method, you:

  1. Pay your fixed expenses through your checking account
  2. Withdraw the remaining amount
  3. Divide the cash into paper envelopes labeled with a category and an allotted amount

Once the money in your envelopes is gone, you can’t spend more in that category until the next budget cycle. 

Example: On an income of $3,500

If your fixed expenses are $2,000, then your envelopes can cover the variable expenses and savings by dividing $1,500 into different categories per envelopes:

  • Groceries: $400
  • Gas: $200
  • Entertainment: $300 
  • Hiking equipment: $200 
  • Savings toward hiking trip: $400


Pros: Easy way to hit your goals without much effort 

Cons: You might hit your goals faster with a different method

If you don't want to complicate your budget, you might use the pay-yourself-first method.

Simply put, 10% of your income goes immediately toward your financial goals. After that, you decide how to spend the remaining 90% between your needs and wants. That means no more feeling guilty while springing on a new gadget or coffee. 

This budget ensures you’ll hit your goals, since you prioritize your savings. You can set it and forget with automatic deduction around payday. (Automatic deductions will keep you on track without having to do the accounting yourself.) 

Example: On an income of $3,500

If you put $350 towards your goals, you can spend $3,150 as you see fit to cover all of your business and personal expenses.

Step #6: Prioritize an emergency fund 

As a freelancer, you need a buffer in your checking account. If you're not careful, setting up automatic bill pay based on the money you’ve invoiced clients for (but not yet received) sets you up for failure. Having a client who pays you late — not your fault, and not uncommon — affects your ability to pay those bills. 

That’s why it’s essential to save an emergency fund. An emergency fund is a separate checking or savings account outside your normal one that can help cover your expenses during a cash flow crunch.

Not having enough money put aside has cost me late fees, a negative checking account balance, and delinquent payments. Even as a budgeting expert, it’s hard to budget with money that’s not there. 

Start small to build up momentum

Most experts advise saving at least three to six months of living expenses, or a lump sum of $10,000.

I say, start by trying to save $1,000. A smaller amount is more attainable than setting a lofty goal. And once accomplished, it’ll motivate you to save more.

Start small with $25 here and there, then gradually increase your deposits. It may not seem like a lot, but even $500 can keep a work lifeline — like your cell phone — turned on. 

Working for yourself is stressful. Budgeting can help you prioritize your time and money for that elusive work-life balance

Athena Valentine Lent

Athena Valentine Lent


Athena Valentine Lent is an award-winning personal finance columnist for Slate Magazine and the author of "Budgeting For Dummies," published May of 2023. Athena became passionate about financial representation for the Hispanic community after teaching life skills in a Title I school where there was no financial literacy being offered. She's now an advocate on issues such as the Latina wage gap and multigenerational housing through her website, Money Smart Latina. Besides Slate Magazine, Athena has written for BuzzFeed, Prudential, Experian, T. Rowe Price, The College Investor, GOBankingRates, and Money Under 30, and now Keeper. She’s also the community liaison for FinCon, an annual conference for content creators and brands in the financial industry. When not working, you can find her reading a Stephen King novel with her main man, a polydactyl cat named Harrison George.

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How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals
How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals

Over 1M freelancers trust Keeper with their taxes

Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.

How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals
How To Budget as a Freelancer: Survive Slow Months & Save for Your Goals

Over 1M freelancers trust Keeper with their taxes

Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.

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Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.

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