Current Date: 28 Sep, 2023

How to manage your money as a freelancer or Enterpreneur


A freelancer is anyone who works as an independent contractor and gets paid on a per-job or per-task basis. Because a freelancer is not an employee of a company, they are free to work on multiple projects simultaneously unless contractually committed to working exclusively on one task until it is done.

Freelancers are typically regarded as independent employees that may work on contract full-time or as a side job to augment full-time employment as time allows. As independent contractors, freelancers often require formal agreements and will agree to a specified fee depending on the time and effort needed to perform the task. 

This price could be a set fee, a per-hour, per-day, per-project fee, or anything else.

A freelancer typically works in the creative, skilled, or service industries, such as film, art, design, editing, copywriting, proofreading, media, marketing, music, acting, journalism, video editing and production, illustration, tourism, consulting, website development, computer programming, event planning, photography, language translation, tutoring, catering, and many others.


An entrepreneur is a person who starts a new firm, bearing most of the risks and reaping the majority of the gains. Entrepreneurship refers to the process of creating a business.

Entrepreneurs are essential in any economy because they have the capacity and initiative to anticipate demands and bring creative ideas to the market. Entrepreneurship that succeeds in taking up the risks of beginning a business is rewarded with profits and opportunities for expansion.

Money management is handling and overseeing your personal or business finances strategically and responsibly. It involves making informed decisions about how to earn, save, spend, invest, and allocate your funds to accomplish your financial goals and maintain financial stability. Effective money management involves:

  • Creating budgets.
  • Tracking income and expenses.
  • Controlling Debt.
  • Saving for the future.
  • Making wise financial choices.

Key aspects of money management include:

  1. Budgeting: Creating a budget helps you plan and allocate your income effectively. It involves estimating and categorizing your income and expenses, identifying areas where you can reduce spending, and setting financial goals.
  2. Tracking Income and Expenses: Regularly monitoring your income and expenses lets you understand your cash flow clearly. Tracking helps you identify patterns, make adjustments, and live within your means.
  3. Controlling Debt: Managing and reducing debt is important in money management. This includes making timely payments, avoiding unnecessary debt, and developing a plan to pay off existing debts, such as loans or credit card balances.
  4. Saving and Investing: Setting aside a portion of your income for savings and investments is crucial for building financial security and achieving long-term goals. Saving for emergencies, retirement, education, or other specific objectives helps you be prepared for unexpected expenses and future financial needs.
  5. Financial Goal Setting: Money management involves defining short-term and long-term financial goals. These goals include saving for a down payment on a house, starting a business, paying off student loans, or funding a dream vacation. Clear goals provide focus and motivation for effective money management.
  6. Making Informed Financial Decisions: Money management requires making informed choices regarding spending, investing, and financial opportunities. This involves researching options, comparing prices, understanding risks and rewards, and seeking professional advice.
  7. Protecting and Insuring Assets: Managing money entails safeguarding assets and mitigating potential risks. This can include having appropriate insurance coverage, such as health insurance or property insurance, to protect against unforeseen events.
  8. Reviewing and Adjusting Financial Strategies: Money management is an ongoing process that requires periodic review and adjustment. Regularly assessing your financial situation, tracking progress towards goals, and making necessary changes to your financial strategies ensures you stay on track and adapt to changing circumstances.

Effective money management helps you maintain financial stability, achieve financial goals, and make informed decisions about allocating resources. By taking control of your finances and implementing sound money management practices, you can build a solid financial foundation and enhance your overall economic well-being.



Being a freelancer or entrepreneur comes with the freedom and flexibility of being your boss. However, it also requires effective money management skills to ensure financial stability and success. 

Here are some essential tips for managing your money as a freelancer or entrepreneur:

  1. Separate Personal and Business Finances: Maintain individual bank accounts for your personal and business finances. This clear separation will help you accurately track your business income and expenses, simplify tax preparation, and maintain a professional financial image.
  2. Create a Budget: Develop a comprehensive budget including your personal and business expenses. Determine your fixed costs (rent, utilities, insurance) and variable fees (marketing, supplies, professional development). Dilligently review and adjust your budget to align with your financial goals and current income.
  3. Set Aside Emergency Funds: As a freelancer or entrepreneur, you may experience fluctuations in income. Establishing an emergency fund to cover unexpected expenses or periods of lower income is crucial. Aim to save at least three to six months' living expenses to provide a safety net during lean times.
  4. Track and Monitor Income and Expenses: Keep detailed records of all your income and expenses. Utilize accounting software or apps to simplify the process. Regularly review your financial statements, invoices, and receipts to clearly understand your cash flow, identify potential tax deductions, and make informed financial decisions.
  5. Invoice Promptly and Follow Up on Payments: Send invoices promptly and follow up on any outstanding payments. Establish clear payment terms and communicate them to your clients or customers. Consider implementing automated reminders or online payment platforms to streamline invoicing and payment.
  6. Diversify Your Client Base: Having just a single client for most of your income can be risky. Strive to diversify your client base to mitigate this risk. Continuously prospect for new clients or customers and nurture existing relationships to maintain a steady stream of work and income.
  7. Save for Taxes: As a freelancer or entrepreneur, you're responsible for paying your taxes. Set aside a portion of your income for tax obligations. Consult with a tax professional to understand your tax liabilities, ensure compliance, and explore potential deductions.
  8. Invest in Professional Development: Investing in your professional development is crucial to stay competitive and expand your business. Allocate funds for training, courses, conferences, or certifications that enhance your skills, knowledge, and marketability. Consider these expenses as long-term investments in your business's growth.
  9. Manage debt Wisely: Avoid unnecessary debt and manage existing debt responsibly. If you have any loan or credit card balances, create a repayment plan to reduce debt over time. Prioritize high-interest debts and consider negotiating lower interest rates or consolidating debts to save money.
  10. Plan for Retirement and Savings Goals: Don't neglect planning for your long-term financial future. Consider opening a retirement account, such as an IRA or Solo 401(k), and contributing regularly. Additionally, set savings goals for major expenses, such as purchasing equipment, expanding your business, or taking sabbaticals.
  11. Seek Professional Advice: When in doubt or facing complex financial situations, don't hesitate to seek advice from professionals like accountants or financial advisors. They can make provision guidance tailored to your specific circumstances, help optimize your financial strategies, and ensure compliance with tax laws and regulations.

By implementing these money management practices, you can effectively navigate the financial aspects of being a freelancer or entrepreneur. Building a solid financial foundation and maintaining disciplined financial habits will contribute to your long-term success and financial well-being.

Excellence Chukwuma Chukwunaedu

Excellence Chukwuma Chukwunaedu

I enjoy marketing, technology and business. I help businesses and brands connect with their ideal customer profiles and build products that excite them and solve their problems.