nikki mccaig financial blog

5 Financial Tips For New Freelancers

Welcome to the financial minefield of freelancing. It’s a confusing, stressful and difficult professional choice to get your head around, and one that is still concerned ‘new’ to the fields of traditional work. You’ll be hearing horror stories of forgotten pensions, late tax fees and the hounds of HMRC pounding on your door. You’ll be counting down the days until you’ve earned enough to take a proper sick day, without struggling to work from your bed. It’s not always easy managing your financial situation as a freelancer – but here are some tips that must just help.

nikki mccaig financial blog

Save, Save, Save

There are many different ways to approach your savings as a freelancer or self employed worker. You can set up a seperate business bank account, schedule direct debits, set up monthly savings goals or simply just move your money manually. But in the end, it doesn’t matter how you save, as long as you do. Depending on how much you earn, you should setting aside roughly 10% of your monthly income and putting it into savings. If you’re still very early in the career, then drop it down to 5%. Either way, you need to be financially protecting yourself for when the tax season comes around.

As a freelancer, you don’t have the luxury of a financial team looking after your NI contributions, so unfortunately you have to do it all manually. This can be really tricky, but the whole process can become a whole lot easier when you get into the routine of saving.

nikki mccaig financial blog

Record and File Everything

From a coffee receipt to a monthly invoice, you need to be tracking all of your spends, income and expenses as a freelancer. Set up spreadsheets online for each category, making sure you can easily find all the information you need to know at the press of a button. This covers your professional expense receipts, i.e. computer software, client meetings, travel and equipment. It covers your monthly earnings, any late fees or missed payments. It covers your savings and how much you can afford to put away each month, and anything else you do with your money that relates to your work. Keep hold of your paperwork, and any physical copies of invoices, expense receipts and letters from pension organisations, collaborations and accountants.

Invest For Improvement

As a digital freelancer, we often use various pieces of software, equipment and services to complete our work. From cloud storage to design and editing programmes, we use these tools to create and deliver our best possible client work. But often, when you first start out, you’ll be accustomed to using the free versions – which typically place certain limitations on what you can create. However, the minute you start earning enough, I seriously recommend investing and upgrading. The difference it will make to your working life will always be worth the payout, and could even help you find more work in the future. You don’t necessarily need to see an instant return to know that your upgraded software is help you build your career.

nikki mccaig financial blog

Limit Your Non-Expensed Purchasing

When you first start out in freelancing, it can feel like the world is your oyster. You have your pick of the best coffee shops to work in, you can dress in the clothes you like rather than ‘office-appropriate’ gear and you can splash out on fancy brunches in the daytime. Unfortunately, this lifestyle definitely has an expiration date, and will very quickly drain your financial resources. As you now have a lot more freedom of where to work, it might be worth simply working from home as much as you can, to help you save on travel and eating out. Even if just for the first few months, try to keep your personal spending to a minimum, until you can establish a secure financial routine – with enough disposable income to afford the lifestyle you want. By all means, make your home space feel as comfortable and productive as you need to, and perhaps splash out on a big packet of your favourite coffee, but always try to think ‘save’ rather than ‘spend’.

Don’t Be Afraid Of Earning

As a new freelancer, it can feel scary to suddenly be in charging of setting your own rates and deciding your own earnings. It’s a big decision to make and one that you don’t want to get wrong. But it’s so important to really understand your worth as a service provider. Underestimating yourself through your rates can only lead to your clients underestimating you too. Do some research into your competitor’s rates, find out the average and then bump it up a little. Don’t be afraid of pushing clients too far, or limiting your earnings based on irrelevant factors such as your age or gender.

It’s also important to stand up for yourself when it comes to your earnings. Chase invoice payments, add on late fees, speak up if you’ve been underpaid or a client comes back with a query. It’s never going to be a fun process, but when you work freelance, every penny counts. So go and get them.


If you have any questions about how to manage your finances as a freelancer, drop me a question through my contact page or check out my recent post on managing your finances through an app!

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