How Freelancers Manage Finances

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Part of being a freelancer means dealing with unpredictable income. Managing finances for freelancers requires close management. But, what if I told you there’s a way to shift from unpredictable income to more steady income that you can count on? Would you believe me?

I’ve personally put these tips into practice and shared them with hundreds of freelancers just like you. I can promise you that it works. The best part….it’s extremely simple.

My secret to managing finances:

  1. Reduce your recurring expenses (personal and business related)
  2. Increase your recurring income 

If you can reduce your recurring monthly expenses while simultaneously increasing your recurring income, the portion left over in the middle continues to grow and that is your profit. If you’re paying out less and taking in more, you can become incredibly profitable as a business. 

Freelancers who manage their finances have freedom

It may sound basic, but if 30%- 40% of your income is made up of recurring revenue and you’re simultaneously reducing monthly expenses, before you know it, you’ll be able to pay yourself each month just from the recurring revenue portion generated by your business. Not sure where you start? A subscription service is a great way to build recurring revenue.

One of the added benefits that I personally love about this concept is how much lowering my personal expenses greatly reduces the pressure I feel each month to generate enough sales just to get by and pay my bills.

If you can control your personal budget, the money you generate from recurring revenue, alone, could eventually pay your salary. 

Did you catch that?

Let me say it a different way…If you can control your personal budget, the money you generate from recurring revenue, alone, could eventually pay your salary. 

How would that change your world?

Let’s take a moment to just imagine how this could positively impact how you feel about your business on a daily basis. If you were no longer worried about finances and making ends meet, would you continue to take on clients who are difficult? Would you take on clients who aren’t a good fit? What if you had more peace in your life? Would you find more enjoyment and fulfillment in your day? How would this change the way you approach sales for your business? How would it change relationships in your life? 

Lowering the pressure can, undoubtedly, lead to better decision making for your business and will ultimately increase your personal contentment in your personal life. And not only is managing your finances creating freedom, but recurring revenue really is the freelancer’s best friend.

Financial Management is Not a Lofty Dream

Now for those of you who are thinking this is a pipe dream, I promise you it’s not. This requires discipline and work to build your maintenance clientele, but as you build it one client at a time, you will begin to see your monthly recurring revenue increase. It took me a few years to get to this point,  but I can now tell you, proudly, that I’ve been paying myself from recurring revenue for a number of years. It gives me the freedom to only work with clients who are a good fit and I no longer have the financial worries I once had.

I attribute these major life changes to an important shift I made in my mindset a few years ago to move my business model from a handful of retainer clients to a large number of small maintenance contracts. 

When you commit to finding a way to generate recurring revenue in your business, get ready to experience massive transformation in your business and personal life.

Once you understand how important it is to create recurring revenue for your business, the next step is to make a commitment to find a way to make it happen. When you commit to finding a way to generate recurring revenue in your business, get ready to experience massive transformation in your business and personal life.

Later this week, I’ll walk you through how to identify the best recurring revenue streams for your business. We’ll also look at how to put your packages together, how to price them, how to start selling the packages and how to overcome client objections.

As a self-proclaimed budget freak and huge proponent of Dave Ramsey’s philosophy of living debt free and paying cash, I would like to close with one of my favorite Dave Ramsey quotes:

“If you will live like no one else, later you can live like no one else.” 


Are you ready to manage your finances? To really let this all sink in, we’re including a BONUS activity to help solidify this new mindshift. Consider taking a moment to journal about all the ways that making this shift could impact your business and personal life. Make a list, print it out and hang it up where you can see it every day. 


Let’s jump ahead and pretend that you have already created a recurring revenue strategy that has grown over time and now covers your salary. That means, all of the website projects you take on are considered “gravy” in your personal budget. Use these questions as a guide to begin to imagine all the ways your life will change from making this shift. Go ahead and write out a statement that could be written by your “future self” the one who is reaping the rewards of creating recurring revenue!

For example:

Now that I have recurring revenue streams in my business, I’m able to focus working 1:1 with clients who I enjoy. I no longer take on project work that I don’t enjoy because I’m desperate for income. I’m able to live more comfortably and because I have less stress in my life, it has given me permission to do more of the things I enjoy like spending time with family, exercising, spending time in nature and cooking healthy meals. I’m looking forward to using the money generated this year from project work to take the trip to Hawaii that I’ve always dreamt of. And from revenue generated by client project work, there’s still money left over to re-invest in creating a new recurring revenue stream next year!

mange your finances and take a trip!

Now, it’s your turn. Go ahead, write your statement!

  • How is your daily life different? (Be as specific as you can)
  • Are you stressing about money?
  • If no, how is not stressing about money impacting your personal relationships?
  • What kinds of things are you making time for now that you are no longer worried about your finances? (travel, physical fitness, hobbies, etc.)
  • What big dreams do you have for your life that you can now move to the front burner since you’re no longer worrying about the day to day?

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