Great Budgeting Tips for Self-Employed Workers
Senior Home Loan Advisor
Caitlin Chen
Published on January 12, 2021

Great Budgeting Tips for Self-Employed Workers


There are always pros and cons of being a freelancer. Some of the biggest perks of
course is having a flexible time schedule as well as the ability to make as much income as you desire. However, the only downside is not being able to always predict when you’ll get paid.

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Below are some tips from Cloe Matheson, a freelance contributing writer who knows from first-hand experience what it’s like to be self-employed and the juggling acts of keeping her finances in check. Enjoy!

From professional autonomy to an unbeatable work uniform (PJs, anyone?), those who are self-employed enjoy some great benefits. As I’ve learnt over the past few years, though, self-employment doesn’t always go hand-in-hand with neat finances. An irregular income comes with the territory, meaning that we self-employed workers need to get a grasp of budgeting quick if we’ve any hope of keeping ourselves afloat in the long run. I’ve put together my best budgeting tips below – so learn from my mistakes, and you’ll straighten out those finances in no time!

  1. Know your budget

    The first step on your way to good money management is determining your budget. If you’ve been self-employed for years, base your monthly budget on your lowest paid month from the previous year. If you’re new to this style of working, you can determine a provisional budget from last month’s income, and then arrive at a more accurate average as the months go by. In either case, the amount you settle on will become your baseline budget, the total bucket of money you can expect to draw from each month.

  2. Get on top of your tax

    When it comes to the top causes of financial issues amongst the self-employed, tax is by far the most common denominator. If you’re coming from a regular salaried job, then your tax would have been automatically deducted from your pay, without any need for action on your part. Now, you need to set aside money for tax as early as it comes into your account.

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    If you live in New Zealand, like me, then you can consider using a tax pooling provider to organise your tax payments. If you’re from another country like the US, on the other hand, you’ll need to allocate a certain percentage of your earnings to the annual tax round. Research your state’s regulations, and chat to a trusted accountant if you’re unsure.

  3. Prioritize your bills

    Prioritize your monthly bills and expenses from most to least important. Start with your rent or mortgage payments, utility bills, transportation costs, groceries, and any other monthly necessities. Any money which is left over can be used for things which aren’t so pressing or predictable, but which still need funding. These are your discretionary expenses: Netflix subscriptions, money spent on meals out, new books, daily coffees.

    Be realistic when deciding what’s discretionary and what’s not. I ended up having to put coffee under the “necessities” category, since no matter how hard I tried, I just couldn’t restrict myself to one or two per week!

  4. Get Insurance

    You know what they say: you don’t need insurance (and specifically, critical illness and income protection cover) until you do. If you have a major accident or need to take an extended break from work, you’ll thank your past self for securing an insurance plan that’s tailored to your business needs.

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    Also, consider how much you drive and the type of car insurance you might need. If you’re working from home, you might consider saving some money with Metromile. However, if you drive a ton for work, you may want to extend your coverage, so explore what is best for you.

  5. Open multiple bank accounts

    As one of the self-employed, you’ll become a master at juggling multiple bank accounts. The typical breakdown is business checking, personal checking, personal savings, retirement, and tax. Provided you’re not too overwhelmed with all of those, I’d also recommend establishing a “rainy day account” – alternately known as a “bare bones budget” – outside of all the listed accounts. This kind of fund will be your safety net if something goes wrong and insurance doesn’t cover it, or if you’re experiencing a particularly low month.

  6. Use accounting software

    With so many excellent accounting softwares on the market, you’d be a fool not to take advantage of them. After I switched over to an accounting software, I halved the amount of time spent invoicing, sorting customer contracts, and reconciling my accounts. Every hour counts when you’re self-employed!

Author’s bio:

Cloe Matheson is a freelance writer based in Dunedin, New Zealand. She has written articles on different topics from career and travel to business and lifestyle
for various blogs and sites, such as
Check out more of Cloe’s work on

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Caitlin Chen Senior Home Loan Advisor
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