today i’m talking about money! when i first left the accounting world and started freelancing, it was a bit of an adjustment not having a steady paycheck conveniently deposited into my bank account every 2 weeks. it was so easy to know how much i was making from a certain project and to spend it before the client even paid me, not even thinking about taxes or savings. probs not the best idea. and because some months are better than others financially, it was hard not to justify a splurge-happy shopping trip in the months where i was making more than usual. so about a year ago i started treating myself like an employee of my own company and paying myself “paychecks” twice a month on the same days reis gets paid. it’s been working out quite nicely! i deposit all client checks to my business account, transfer about 20-30% to my business savings account for taxes and savings, then i pay myself the same amount twice a month. this has really helped me manage our finances (and save!!) because regardless of what i’m actually bringing in that month, i still get paid the same amount each month. any other freelancers out there have money management methods? i’m so interested!
I’m definitely taking notes here! I’ve been trying to get a better system for myself so I’m not so overwhelmed with the “unsteady” pay thing but I really like what you shared here. Your accounting background really helped you out! Thank you so much for sharing Jay!
This is such a great idea! I’m not freelancing full time yet, but I am definitely going to start implementing some thing like this when I take on projects for clients!
this is a great idea! thanks for sharing :)
This is an interesting option. I’ll just put 30% on my savings account for taxes and savings and the rest stays in my checking account. Maybe I’ll give this a try :)
that’s brilliant. i put 30% away into savings immediately, but have never really been sure how to do the “paying myself” part! i like the idea of the same amount every “paycheck” – easy to count on and building up savings would be so much easier! love it. thanks for the tips (i had no idea you used to do accounting!)
you’re a genius.
i love this idea.
more money/finance posts please.
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I love this! My accounts feel so messed up right now – and this seems like a great way to get everything in order :) Just happened on your blog and loving it! xo
wow, Jay! That is so savvy and responsible of you! I’m impressed! I’m still patting my self on the back when I remember to pay my credit card on time. woo, go Heather!
I love this system, I´m probably going to start doing it.
I´m starting as a full time freelance next month and It´s the first time in my working life I will have no clue of what I´m earning each month. I´m partly freaking out about how I am going to manage my finances…
I´d love to see more posts like this from you :)
Love this idea!!! I going to apply this to my business. I just started and this will help out a lot. Thanks for the advice.
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This is so helpful! The lack of that regularly scheuled, bi-monthly paycheck has definitely thrown me off kilter so this method will definitely help me breathe easier. Thanks Jay!
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That makes a lot of sense. Initially, I was thinking about setting aside 40% for taxes to be on the paranoid side, but you’ve given me something to think about. Thanks
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Thanks for this! I started Freelancing about a month ago and definitely struggling with this. Hard to deal during the down times but going to make it work. Thanks!
xx
Lauren Jade
This is the best advice for managing finances if you’re starting out! My partner and I have been self employed for 2-3 years now and I’ve been keeping strict monthly accounts to try and work out how much tax we need to pay at the end of the year. We basically keep a healthy float in our business account and pay each other a set wage each month. Some months of if we’ve made a bit more we pay ourselves a little more or if we have made less, we try to pay ourselves just enough to cover our outgoings and make sure we don’t take out more than our designated float from our business account.
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Such a great idea. i’m pinning this. On another note I love your blog’s aesthetic and how helpful this graphic is.
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