Be a Freelancer Who Actually Makes Money — Ten Quick Tips

As a freelancer, the most important gift you can give to yourself and to your freelance business is to clean up your financial life. When I started freelancing, this was a very big can that I kicked down the road time and time again. I grew up in a middle-class house full of tension related to finances. My parents fought constantly about money. I learned very early on that money could be the source of a lot of trouble if you are not careful with it. My response as a young adult was to emphatically “not make money my master.” So I ignored it. I paid bills when I wanted to. I let parking tickets sit on my desk in a pile of papers. I checked my bank balance only when my bank card got denied at the register. I was so hurt as a child by the constant battle about money, that I didn’t want to deal with it, learn about it, or manage and structure it. I physically got ill when I had to sit down and handle finances. “I am not my credit score!” is the way I would rationalize my flagrant disregard for my own financial life. Huge mistake. As a result, my credit score plummeted, debt stacked up faster than I could swipe, and I was 25, 27, 29 with too many bills to pursue my creative dreams.

I knew, though, that I couldn’t continue down that road. And if I was ever going to give myself the chance to create the life I wanted, I had to get my finances under control. I started reading Suze Orman books, devouring financial blogs, and learning anything I could about how to reduce my debt. The truth is that it took years to clean up my finances. But it allowed me to become a full-time (and long-time) freelancer and take control of my professional life.

The greatest lesson that I learned in that process was that I was creating my own anxiety. The angst, the nerves, the ill — it was all coming from the not knowing. If I didn’t know how much money was in the bank or how much I really owed to credit cards or what day of the month my car loan was really due, I was highly anxious; and I didn’t even realize it. I just thought that keeping myself in the dark about these things made me “free.” It did not. When I did clean up my financial life, though, I was able to see — on a piece of paper, or computer screen — where every penny was going and how I could pay my bills on time, save money, and accomplish my financial goals. And even though it took a long time to wipe the debt away, I was calmer because I could understand my own cash flow.

As a freelancer, there is often inconsistent or unpredictable cash flow — which makes it all-the-more-important to manage your finances well. In an ideal world, you could keep $5k-$10k in the bank as a buffer zone so that you can ride the ebb and flow of your freelance finances. That is a luxury and privilege that most freelancers do not have. There are things you can do, though, to be smart and proactive about your finances. Here are ten tips from my new book, Freelance Heaven. There are 99 other tips in the book, but here are the ones that relate most directly to financial management:

  1. Set aside accounting time. One of the things that helped me change my relationship with my finances was setting aside time daily and weekly to deal with my accounting. Every morning, as soon as I start work, I check my bank balance. It’s a simple step. Most banks even have a phone app now. But it’s helpful to take away that sense of not knowing. Weekly, I have two hours set aside (for me, it’s Tuesday and Thursday mornings) to review my checking account log, pay bills, and send and follow up on client invoices. I also scan all of my receipts from the week so that I have a digital copy of those archived for tax time. Having dedicated accounting time allows me to contain my anxious thoughts about money to specific hours in the week, so that I am not always and ever thinking about the state of my checking account.
  2. Designate sacred hours. One block that freelancers often seem to have — and I had this block for a very long time — is valuing all of the hours in a week the same way. Monday at 9am is the same as Sunday at 4pm, which is the same as Thursday at 8pm. What do I mean? When I work on a project and I’m in a groove, I can stay at my desk until all hours of the night. And I did that for a long time in the beginning of my freelance career. So, clients would get emails from me at 11pm, 6am, 3pm. They quickly learned that I worked around-the-clock. And so they came to expect that I would work late, work weekends, and work despite other personal commitments. I no longer work this way. For me, the weekends and the hours of 6pm-midnight are sacred hours. These are reserved for family, friends, the gym, errands, birthday parties, dates — ya know, the general makings of a healthy and balanced life. So, in my calendar, these hours are blocked out. If a client needs something fast and I don’t have enough hours in the business day to get something done for them, I tell them that I have to charge them a higher rate. Just like Uber charges surge pricing when cars are in-demand, I charge extra for me to use any of my sacred hours. No work week is perfect, and sometimes you just have to get the job done. I get that. But it is important to value your time. Staying present to boundaries is a cornerstone of a healthy freelance life.
  3. Designate two pro-bono hours per week for “fee-free” projects. If you’re like me, everyone and their mother (and my mother) will want and “need” you to do something for them. Once they hear that you run your own business, that you left office life to work from a laptop at the local coffee commissary, friends and family come out of the woodwork — “He has time! He doesn’t actually work.” Some are well-intentioned and want to help. Friends and family will send you clients, connect you to business associates, and generally be a force for good word-of-mouth to send you freelance business. For others, you are just a means to an end — the end being “getting shit for free.” First, it’s important to know the difference. Is it someone you haven’t heard from in three years who “needs” a website? A dress made? An app created? Their kid tutored? Or is it someone who mentioned you when a friend was hunting for a freelance writer? Be clear about whom you will take business from and whom you won’t. My rule of thumb is that if I can charge my regular rates, the business is good business. If I have to lower my rates just to not offend my friend or family member (or if the pure headache of dealing with the potential client makes it completely not worth the cash), the business is not business that I want. A simple “no” is well-phrased for family as, “I really appreciate you thinking of me, but my plate is full right now, and I don’t want to make commitments that I can’t keep.” It’s not rude to say no. Your business is your livelihood, and you should treat it as such. You can be kind, generous, and giving, but you can’t pay your cable bill with anything but actual money. Being clear about what they can expect from you keeps your message clear, “I love you, but I’m not a doormat.”
  4. Charge late fees. Charging late fees is basically how every white-collar business in America makes money without doing anything. And as a freelancer, you can and should charge late fees, too. Simply include language on your invoices like so, “Due to the nature of my freelance work, I bill with a customary ‘Net 30’ cycle. This invoice is due to be paid on December 3. A $40 late charge will be added to your next invoice if payment is not received on or before the due date. Many thanks.” (“Net 30” is accounting speak for the expectation that the invoice will be paid out within 30 days of receipt.)
  5. Get payment upfront. It is pretty customary for freelancers to charge clients a portion of their total fee before work begins. There are a million ways to structure your payments, but a good way to do it is in thirds: 1/3 upfront, 1/3 at the project’s mid-point, and 1/3 upon delivery. Granted, this varies widely from industry to industry, but thirds ensures that you have a commitment from the client before work begins, that they sustain the work by paying for it mid-way, and that they complete their financial commitment as you complete your work commitment.
  6. Create an email address from Betty. I used to joke with my mother that I had an assistant named Betty. Whenever my mother called my cell and I answered at Starbucks and she made fun of my “working,” I would joke that Betty and I were hard at work. So, when I had trouble getting paid on a freelance web job, my mother suggested that I have “Betty” send an email to the client requesting payment. I laughed. But she was on to something. So I created a phantom email address (not actually from “Betty”) from And I sent what looked like a standard form letter email from the accounting department. Clients do this all the time. They pass the buck. They say, “I’m so sorry. Someone else handles the accounting. Let me check with Susan to see what’s going on with your invoice.” So now, if they’re late, I send an email from Betty to the client and to Susan asking where the hell my money is. Some clients assume that it’s from an outsourced assistant or from an online accounting software. Either way, it reminds them that they are behind on their payments. But if they don’t pay on time, it sends my work into a downward spiral and has lasting consequences on my day-to-day financial life. A week matters. A month matters. I once had a client who owed me money for six months, and like an ass, I kept working for him. No. Do not do this. You will only screw yourself in the end. Freelance isn’t free. Even President Obama agrees. #freelanceisntfree
  7. Save 1/3 of each check and pay quarterly estimated taxes. Most freelancers work as contract employees — independent entities contracting with the client organization for a specified time period or project. If you’re reading this, you likely already know this. Don’t forget (like I used to) that in-house workers are only taking home 60%-70% of their gross income biweekly; their employers are paying — on their behalf — local tax, state tax, federal tax, Social Security taxes, as well as contributions to their medical insurance, retirement or 401(k) accounts, and unemployment insurance. As an independent contractor, you have to do all of this yourself. Make it simple. Set up both a checking and savings account with your bank. Nickname your online savings account “Tax Account,” “Uncle Sam,” or “The Goddamn IRS.” Either way, transfer 33% — a rounded 1/3 — of each client check into your saving account. Then file quarterly estimated taxes through your tax accountant or directly with the IRS. You aren’t required to do this if you’re operating as a sole proprietor (meaning: billing clients as yourself under your social security number), but it will help you get into good habits. If you can leave your tax money in your savings account until tax time, all the more power to you. And make sure you find and use a tax accountant who works with freelancers. He or she can help you figure out write-offs that make sense and are legal. For example, it is possible to write-off a portion of your apartment rent as office space, etc. Most importantly, as you manage your finances week-to-week finances, get into a habit of only counting on 2/3 of that check as actual income.
  8. Don’t auto-pay your bills, but set them up to direct pay. The world loves 30-day increments. The entire American economy runs on what consumers can afford to pay monthly. But a freelance business doesn’t always earn you money in nice, even increments. You can’t always expect to be paid on time, every time. So, don’t auto-pay your bills. The rhythm of your cash flow is sure to be screwed up if your gym or cable bill automatically comes out on the 17th but you’re still waiting on an important and large client check. That said, most “direct pay” online features are very useful. These are features that allow you to pay your bills directly from your bank. You go in and click, and the bank writes the check and sends it. These features give you control over your money. Auto-pay features give others control over your money. Companies do this so that they can have a steady income stream, automate it via computer, and not think about it. It’s strictly for their convenience and ease of management. But it can screw you royally if you live check-to-check.
  9. Price according to the value of the service in the marketplace, not how long it takes you do something. I have a freelance illustrator friend who tells this story. A client of his saw him mock-up an illustration in ten minutes — done! — and asked why he was charging her $350 for the project. “But it only took you ten minutes. What’s your hourly rate? I’d rather pay that.” He replied, “It took me ten minutes. But it took me twenty years to be able to do it in ten minutes. That’s what you’re paying for.” Talent is talent. And clients who seek out your services need your services. Don’t undersell yourself by not being ballsy enough to charge what you’re worth.
  10. Know how much your time is worth. Pricing is an art in and of itself, but ultimately it comes down to one question: is it worth it for you to take the time to work on the project? That value can come in many ways: cash, contacts, referrals, the promise of future work, etc. But only you can determine if something is worth your time and whether you want to charge an hourly rate, a project rate, or a retainer rate. It helps, though, in that thought process to understand what your time is worth. The easiest way to calculate what your time is worth is to first decide how much to pay yourself annually. So, as CEO of your freelance life, what would you like to make every year? You can arrive at this number out of thin air, by analyzing your industry and your place in it, or by basing it on your last full-time in-house job. Your instinct may be to take that number and divide it over 52 weeks, and then divide that by 35 or 40 hours in a standard work week, all to arrive at a basic hourly rate. But be careful. As a freelancer, you have to factor in (a) vacation time, (b) personal and sick time, (c)taxes, (d) Social Security, (e) medical insurance, (f) retirement savings, and (g) unemployment insurance (which Uncle Sam will charge you at tax time). So, let’s get into details. If you didn’t take these into consideration, you would calculate the value of your time like this: I want to make $100,000 per year. So, 100,000 / 52 weeks = (approx.) $1923/week. If I usually work 40 hours per week, so that’s $48/hour. So, my time is worth $48/hour. No, no, and no. You want to make $100,000 per year. So, first see what that is before taxes. Let’s just approximate all taxes, Social Security, and unemployment insurance at a very general 30%. So, you need to bring in (approx.) $142,857 to come home with $100k. In order to make $142,857 over the course of year, you need to divide that by the actual days and hours that you would work on client work. So, 52 weeks minus 4 weeks of vacation (yes, four weeks!) = 48 weeks of work per year. Let’s take out one week for sick time, so 47 weeks. And let’s take out one week for the occasional personal day, so 46 weeks per year of actual client work. So, $142,857 / 46 weeks = (approx.) $3,105/week. If we use the same 40 hours per week for this calculation, that’s (approx.) $78/hour. And that doesn’t include taking time out of the week for business development, accounting, fee-free pro-bono projects, etc. These are very broad and quick calculations, and you should consult with a tax attorney to really put to pen to paper on this. But my point is this: your time is worth way more than you think it is.

Check out Julio’s new e-book, Freelance Heaven: 100 Ways to Make Freelance Life Easier and Avoid Freelance Hell, available online at and on

Writer/Director based in NYC. Politics + Pandemic + Personal. Outspoken so I can help make sense of this modern world.