Budgeting is hard enough for regular employees with a set salary, so no wonder it’s a real challenge for freelancers with an irregular income. If you don’t manage your money, it can feel like your earnings just disappear before you have a chance to pay the bills.

Well, with the same dedication and planning you apply to your freelancing work, it is possible to thrive with an unsteady income. Keep reading to discover six tips for watching your budget while freelancing.

In this article, we tell you the best six ways to save money and make your freelancing sides jobs turn into an actual business. Use these tips to make money and spend money in a way to help you become successful as a business owner.

1. Come up with a baseline income based on a low estimate of what you think you’ll earn. You will need some idea of what you will make in the next month or two to create a solid budget, so try to predict the lowest amount of money you’re likely to make and go from there.
   
   If you’ve been freelancing for over a year, you can use the months in which you earned less money to create your expected baseline income. If it’s your first year, you may just have to guess based on the projects you’ve been paid for so far.
   
   The important thing is to stick to the low end of your estimate. If you budget for a smaller amount and you make more money than expected, you’ve just earned a bonus! If you budget for a larger amount and don’t make it, you might have just missed a rent or electric bill payment.
2. Use a separate bank account for your freelance business. It can be easier to keep track of your budget if you use a separate checking or savings account for your freelance earnings.
   
   The money you keep in that account can be used to keep improving your freelancing business and pay taxes when April comes around. You can even have a third account to use just for taxes.
   
   If you have a large pool of cash sitting in one account, you’ll be more tempted to splurge. So, get into the habit of keeping your freelancing profits separate from your personal money.
3. Pay yourself a salary from your freelancing account. This tip comes from freelancer Steven Snell. If you feel that watching your budget while freelancing would be easier if you were paid like a normal employee, pay yourself that way.
   
   Pick a set amount using your baseline income estimate and pay yourself that amount every two weeks. You can adjust this salary based on how your income changes, but keep it lower than what you actually earn so you can keep some money in the account.
   
   This will make it easier to treat your earnings like a paycheck and plan accordingly.
4. Use a separate credit card for business-related expenses. Again, it’s important to think of your freelancing work as a real business, because it is a real business!
   
   Having a small business credit card to use just for expenses related to your freelancing career, such as new software, computer parts, continuing education classes, or Internet bills, can help you watch your budget while freelancing. If you feel you’ll be tempted to use this credit card while out on the town, leave it in your home office and just take your regular credit card with you.
5. Push yourself to meet monthly income goals. Having tough but realistic goals is a great way to stay motivated. Set a goal for how much you’d like to make from projects each month and work on improving yourself as a freelancer a little more each day so you can achieve it.
   
   If you prefer, you can also have quarterly or yearly goals. Any goal that keeps you applying for projects, updating your marketing plans, learning new skills, and networking will be helpful.
   
   Again, you’ll be using a conservative estimate for budgeting, so extra money will act as a helpful cushion.
6. Wait for your checks to clear before assessing your earnings. This tip comes from freelancer Sabah Karimi. Have you ever heard the expression, “don’t count your chickens before they are hatched?” This is a good attitude to have in the world of freelancing.

Sometimes, clients will take a few weeks or even months to pay you. Do not count on money you’ve made from a project until the client’s check clears. Not only will this help you budget conservatively, it will also keep you motivated to follow up with the client about payment instead of just passively waiting for the money to come in.

Do you see what these six tips for watching your budget while freelancing have in common? They are all about treating your freelancing job as a business.

If you plan your income, pay yourself a salary, use a separate bank account and credit card for your freelancing work, work hard to meet professional goals, and treat accounts receivable responsibly, you will be better able to manage your income like a professional.

Guest Writer
Ashyia Hill

Ashyia Hill is a social media advocate for the credit card website, Credit Donkey.  She enjoys reading content on her Kindle and Blackberry during her spare time.