Skip to main content

What has my freelance life taught me about finances?

'Budget' photo (c) 2012, Tax Credits - license: http://creativecommons.org/licenses/by-sa/2.0/
Financial matters is the hardest part of freelancing for many people. And for me, too. It can be a real nightmare, because your income can change month after month. Hopefully this will be a good change, but there will also be slow periods with almost no work and thus no payment coming in.

I am still learning to manage my finances. The fact that I am a registered individual entrepreneur motivates me to keep the budget and not spend all the money at once (though at times I do feel like spending it all on shoes, makeup and other absolutely necessary things ;)) So here are my financial tips or rather lessons that I've been taught. Please feel free to add yours in comments!

1. Before you set your rates:
  • Count your expenses. I mean count how much money you need for food, clothing, any loans/debts that you may have to pay + taxes, insurances etc.
  • Then you need to think about professional costs - new equipment/software, membership payment in any professional organizations etc.
Then you will know the minimum that you need to earn. I count the expenses on a monthly basis, but you can choose counting them week by week etc. That will help you not to set your rates too low.

2. Market, market, and market your services. Marketing is a key element that helps you to break the feast and famine cycle. Marketing may include:
  • attending networking events, both online and offline;
  • social media marketing;
  • direct advertising;
  • telling your friends you need more work. I am so thankful for my friends! As soon as they learned that I went freelance they were the ones who provided me with work, gave advice and helped as much as they only could! I am very thankful to them. They introduced me to some clients with whom I've been working occasionally since then.
  • I think one of the best ways to avoid the feast and famine cycle is to deliver excellent work every time. It's a vital part of your marketing when you show by actions that you are as good as your website says you are (or probably even better!).
3. You absolutely need to know how much you actually earn. I still keep my Excel sheet of all projects, deadlines, payments and invoices. I wrote about it here. It helps me greatly!
4. Make a budget. I do it in a simple way: I make a 2-column chart. In the first column I have my expenses for a given month and in the other column I list expected payments and their dates. That helps me to see how much extra money I have, because there are always items on my wish-list. Besides, it's always nice to have some money set aside for holidays, gifts for friends etc. ;)
5. After you made your budget the next important thing is stick to it! Everybody hates unexpected costs, though some of them are inevitable, but do your best to stick as closely to your budget as possible.
6. Do your best to set some money aside in case something unexpected happens and you need money! People always hope nothing will happen, but life is life...
7. Do your best not to take any loans. In my case, this has not always been possible. But I have always done my best to keep my credit history spotless.
8. If possible, hiring an accountant would be a good idea. I am actually thinking about it, but I am still not sure I need an accountant on a permanent basis. I do use the help of a professional accountant at the time when I need to fill in my tax declaration at the end of the financial year.
9. One of my greatest concerns has always been insurance. I don't have professional indemnity insurance yet (Russian insurance market is different and insurance policies are different, too. But I am looking for a suitable variant). I do send some money to the Pension fund every quarter to make sure I won't die of hunger when I get old. Besides, I have insured my daughter. She is going to get a substantial sum of money when she finishes school and needs it for her higher education, plus she's insured in case (God forbid!) something happens to her parents. The monthly payments I have to make are fairly small, but at least I am more or less calm and sure that my child will have an easier life than I had during my university years.
10. As a little bonus, here is an article in FreelanceSwitch blog about personal finance apps that can help you create a budget and stick to it. Hope you find it useful!

Dear colleagues, how do you manage your finances? Were my tips helpful? I am looking forward to your comments!


I'd like to remind you about the contest that we are running at Sharp End Training Russia. A simple tweet or Facebook "like" can make you a winner of our Complete Blogging Toolkit for Translators! It's a wonderful opportunity! The final countdown will start very soon, so don't miss your chance! You can read more here.

Popular posts from this blog

10 interesting facts about the Russian language

In my previous post I promised to follow with the  interesting info about some other languages. So here are 10 facts about the Russian language which might be of interest to those who are studying it. If you would like to have this list in Russian, please contact me and I will send it to you by email. So, what do I find interesting about my native language?

1. Russian has about 500,000 words, but only 2,000-2,500 of them are used frequently. 100 most frequently used words make 20% of all written and oral speech. A high school graduate's vocabulary usually has 1,500 to 4,000 words. Those who have graduated from a higher educational institution normally have a richer vocabulary consisting of approximately 8,000 words.
2. It's compulsory for all astronauts in the international space station to learn Russian, so we can call it an international language of space :)

How to Reply To a Negative Feedback About Your Translation

We are humans and we screw up many times!

And receiving a negative feedback about your translation work if one of them.

As translation professionals, we work daily with people from different cultures and backgrounds. So, it is quite important to keep a level of etiquette while we do our business communication.

Whatever your years of experience or your educational background, there are times when daily life affects our business badly. It is how we react to these situations what makes a big difference between professional translation service providers and those who are not.

I was lucky enough when I started my translation career back in 2004 to read about the “A Complaint Is a Gift” business book and receive my training by a true professional Arabic translator.

My colleague taught me the tactics of a professional’s reply to a negative feedback and the book mentions the bright side of receiving a complaint about your work. If the client does not like your work, he can just move to anothe…

Time for another update about guest posts, business, blogging and more!

Hi everybody! First of all, thank you for reading my blog. I love to see that the number of my subscribers is growing every week. That's so inspiring!
I've got some news for you. I am amazed with the way my work and business are developing. Life is getting more and more interesting and, hopefully, these changes will be good for you, too! So, here are my news: