Save. Spend. Splurge.

Inside a Freelancer’s Brain when Planning for Money and Budgeting

Freelancers don’t work like employees in the sense that our jobs are very unstable, but the risk that we take, means we can reap a greater reward.

Although, if I were to wax poetic on this “risk” that freelancers take, people can get fired at any time without notice and for no reason, especially in the U.S.

Case in point? This Instagram post from @humansofny

“I took work calls on my wedding day. …. So I took it pretty personally when I got laid off”

This guy was DEDICATED as an employee, and yet, got fired.

How is that any different from a freelancer? But I digress.


Back to me.

I am about to end my contract in a couple of months.

The chances of me being renewed are quite high but then again, as a freelancer, you NEVER KNOW, especially since I have been very tired, burned out and snippy as of late.

All this work, this pressure, it is relentless and it is partly my fault for not taking vacations or days off because I .. am… a …freelancer.

If I don’t work, I don’t get paid.

If I stop, even voluntarily, I think about the money I am missing out on when I had said contract.

As a general rule, I never take vacations or sick days while on contract but if contracts keep dragging on like this, it means I’ll never take a break.

It’s a catch-22.

I work on the 2 year savings principle

Before I do anything, I work on the 2-year principle — how much money do I need to cover the next two years in business and life?

Business: Need $25,000 for 2 years

Personal: Need $72,000 (@ $3000/month)*

Total: $97,000 needs to be saved

*Assuming this is net after taxes!

So, I just go through my accounts, and do I have that in cash?

Yes. Check and check.

I have $137,000 in cash, so I am covered.

I have a great buffer of $40,000 which I keep aside to cover taxes, and other unforeseen expenses. It even gives me another quarter to a half year or so of working if I have to.

As it stands, when I do the check on my finances, I am good. I don’t need to work past this contract for 2 years.

Of course, I will LOOK for work if my contract ends, but I won’t need to stress out about it, as long as my spending can be kept down.

My spending is not also me with style and shopping, but my partner and his love of kitchen equipment of which I pay half of. *sigh*

I am going to top up my private lending to $10,000

Now that I have some extra money around, I am very likely going to top up my account to $10,000 to be invested into private lending with Lending Loop — I did a full review here and you can get $25 if you invest $1500.

This is an ALTERNATE form of investing.

This is not my main form of investing, but it doesn’t hurt to branch out into other areas and take risks with amounts that you are willing to lose so to speak, and not be crippled by.

Of course, putting your money in the stock market or in a house is not any safer, really, but it sure isn’t quite as ‘alternative’ as private lending is.

Sign up here at Lending Loop with referral code 7B03F0 and get $25 to get started once you invest at least $1500 (I get $25 too when you do this).

I just have to, now, in the last months of my contract, work on my spending and make sure that I don’t go crazy while on vacation or traveling.

I need to conserve my money so that it can last as long as possible while I am off work.

Time for the

Scarcity Mindset

….where I tell myself I have nothing.

And I don’t want to sell investments to live, so I need to buckle down on the spending.

How do you handle your cash flow and budgeting?


  • Financial Orchid

    Why does your business need $25K for 2 years if you’re not working?

  • Financial Orchid

    I looked at P2P lending too however for ppk who have a job and maybe a bit of stocks/bonds the return from the P2P lending is also added tot personal income pushing working ppl into even higher tax brackets.

    So unless the principal invested is sizeable or there is a tax break thru investing under your incorporation govt is expected to claw back at least 25% of the ROI in P2P

    Good thing u brought up taxes, because for most ppl even with no earned income, the mix of rental income, bonds, and dividends alone would result in some tax liability. Unless one earned $50K in purely dividends only I read somewhere?

    My required emergency fund is probably about 24 mths as well given I’ll likely take min 6-8 mths off just to travel and make myself feel better after leaving a state of extremely low morale. Def need to account for taxes as I’ll still be earning passive income during that time.

    • Sherry of Save. Spend. Splurge.

      Yes, you have a tax liability unless it is only dividends.

      I think it is not a good thing to not put your money into investments that could otherwise be lucrative just because of a tax.

      This logic would mean that people should not accept higher salaries because it would push them into higher tax brackets. I’d rather make more money and pay more taxes because the overall net is I get more money.

      • Financial Orchid

        Yes your logic is of course sound. In my life stage, millennial employee working full time, it is probably in my better interest to deploy extra cash back into growth stocks for long term growth rather than growing passive income at this time since I have a longer time horizon then convert the grown funds down the road into a dividend portfolio in the later years when I work less, retire, or get replaced by younger cheaper labour.

        If you are expecting unstable income in the short term then it makes more sense to grow passive income eg expecting to be benched next year or want to take time off

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