To me, the work world seems cut in half between those who get a regular, timely pay check, and those who don't (me). With pay checks often coming one, two or even six months down the road, I have to take extra care to make sure that my X dollars per month/project or word will pay my Y bill/credit card/shopping trip needs. In addition, the slow paying clients can often put a cog in my carefully-built machine. My only recourse, then, is to build it that much more carefully. How do I do that? Let's take a look.
Get Down To Brass Tacks
First, figure out what you really, truly and essentially need to live. Now, I'm talking food, rent and internet here. Figure out every "for sure" expense such as utilities, phone, food, medical, gas and car-related expenses (repairs, parking, tags and registration, etc.). How to get to this place? One way is to track it all for a month, and then plug it into a spread sheet. Doing this brass tacks budget will help you to see what you really need, and what you "waste" every month. Your goal here is to cover your bare expenses with one or two regular, committed, long term clients.
Get an Emergency Fund
I know, I know this is near-crazy in this day and age. I don't know hardly anyone who hasn't touched their emergency fund. But you're in a different place than they are. You are ON YOUR OWN. Your emergency fund is not optional, it's a no brainer. Use a couple one-off projects to funnel money into a savings account.
Cover Your Bases
Check out the insurances you need to cover your backside. This article links to a whole lot of different insurances that freelance writers may or may not need. Be honest with yourself and figure out what is a NEED. Don't be fooled, though. Better to pay premiums now than be sorry later. Try to generate enough passive income to cover insurances.
Track Everything and Pay Your Fair Taxes
I've mentioned my spreadsheet in the forums a million times on this site. That's because I really believe in tracking every dollar and every hour. I am religious about money in versus money out because I only want to pay my true, fair share of taxes. If Uncle Sam says that I can pay less taxes because I bought coffee while working with my client, than darn it, I'm going to buy coffee and pay less taxes. But I can't do that if I'm not being serious about tracking everything. Then, pay your taxes! As freelancers, we're supposed to pay quarterly. If you don't pay quarterly, you run the risk of paying extra fees. Now who would want to give Uncle Sam anymore than their fair share without fees? Not me. Pay your quarterly taxes.
Have One Other Way to Make Money
Have something to fall back on. I teach occasionally. I appreciate the (somewhat) regular income. It's important to have something to fall back on. This cash can be sued to rescue your budget, or to put into a retirement fund.
Lastly
Don't be afraid. I know that I am often negative or whiny about cash flow on my blog. I try to be realistic with you about the challenges of the freelance life. However, were I to sit here with you and enumerate the benefits versus this one drawback (my only one, really), I know that the positives would far outweigh any juggling I have to do. You couldn't pay me to go back to the cube life!
