Being A Frugal Freelancer Pays Off


When we start any new freelancing venture there are a lot of things to take into account. Where will I work? Can I afford it? What services do I need to assist me? The list goes on.

So how can we begin without going into a large debt?

I’m all about lists and weighing up the pros and cons of any expenditure but not everyone does, so let’s take a look at some basic elements. What do you need as opposed to want is the question you need to ask for everything – make that your benchmark.

1. What can you do without?

An office with expensive office furniture. These are nice but not essential. You can work from home and hold virtual meetings, visit your clients premises or even meet at a coffee shop. (With the COVD19 pandemic – virtual meetings have come into their own and proved travel is not essential). TIP *If you are holding virtual meetings make sure the area behind you looks professional – no unmade bed, dishes in the sink etc.

Do you really need an expensive car with large loan payments? If you are only using the vehicle spasmodically, could a taxi or bus be a better way to travel? Without that car monthly payment how much extra cash do you have?

Business clothes are another expense for the ‘normal’ workplace but working from home means you only need a few ‘business outfits’ for those personal one-on-one meetings. This doesn’t mean splurge on casual wear – pocket the cash and use it elsewhere. TIP * Make sure you are smart casual for those virtual meetings though.

2. Budget Everything 

As you are starting out, look at all your costs, from home and car insurance to utilities to any services. Call your current suppliers for cell phone, home phone, internet, insurances, utilities, website etc. and ask for their best deal. TIP *Make a calendar note to do this every 6 months or so – deals are always being renewed and existing customers are not contacted about them! Also research website’s – many are free without having to pay hosting.

Is there anything you pay for now (in the workplace) that you can cancel out completely? Buying lunch or tea/coffee – rather than being home to make your own. This is a ‘hidden’ expense that adds up significantly. Your commute is going to be super short too – meaning savings on gas.

Research business bank accounts – there are many options. Find the one that works for you with the lowest cost (if not zero) charges.

3. Pay Yourself First (& the Taxman)

We have all heard the saying ‘pay yourself first’ but as a freelancer this is crucial. Firstly, set aside a percentage for tax for each project and put it into a savings account. That way you make some extra cash while it sits there until tax time. Secondly, set up an automatic payment into a separate savings account (RRSP, TSFA or other pension friendly account) for retirement. It may seem a long way off but the sooner you start the more money you will have when you do retire). Also make sure you have an emergency fund, which will keep you financially viable if projects are not covering your essential bills. Again this can be tax refunds, birthday or bonus payments or even severance pay. Don’t splurge it – bank it! We all need a financial cushion. It gives us peace of mind.

4. Be Aware

Many charges can increase without notice on some services so always double check your bills. If a change happens call the company immediately. Don’t assume the charges remain the same – keep track. It is always frustrating realizing a charge increased 3 – 6 months down the line and you can’t get a refund!

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5. Accounting

This is an area many of us do not have expertise. However, there are many accounting packages that aid daily, monthly and annual expenditure and income tracking. If you can get into the habit of regularly inputting your receipts, invoicing etc. many packages will have a report you can use for your tax return. You do not have to spend a vast amount on a package. Again research is key to find one that a) you find easy to use and b) affordable. The other options are: to do it yourself with Excel sheets, a ledger, or just dump everything on your local tax agent! 

What costs have you saved with your freelance business?

Please share them in the comment section. We can all benefit from each other’s experience.