Managing finances is essential to freelance writing success. From tracking expenses to setting aside taxes, here are the basics of freelance financial management.

1. Open a Separate Bank Account

Opening a dedicated bank account for your freelancing income simplifies budgeting and tax reporting, making it easier to separate business from personal expenses.

2. Track Your Income and Expenses

Using financial software like QuickBooks or a simple spreadsheet can help you track every dollar earned and spent. This is essential for understanding your profitability and preparing for tax season.

3. Set Aside Taxes Regularly

As a freelancer, you’re responsible for your own taxes. A good rule of thumb is to set aside 20-30% of your income for tax purposes. Consider working with an accountant if you’re unsure about tax requirements.

4. Budget for Irregular Income

Freelance income can vary month-to-month. Plan for lean periods by creating an emergency fund to cover expenses when work slows down.

5. Invest in Retirement

Since freelancers don’t have access to employer-sponsored retirement plans, consider options like IRAs (Individual Retirement Accounts) or other retirement savings strategies. Start small but stay consistent with contributions.