Being a freelancer means getting to be your own boss, call your own shots, and enjoy some of the flexibility salaried workers don't get. However, it also means opening yourself up to the possibility of losing clients and having your income take a hit in the process.

It's no wonder, then, that 63% of freelancers consider themselves financially unstable, according to a new Ipsos Marketing study commissioned by TaxAct. If you're one of them, here's how to get your financial house back in order.

Man with headphones around his neck working at a laptop


1. Follow a budget

Though it's important for all workers to have a budget, it's especially crucial for you to have one as a freelancer. Without a solid understanding of where your money goes month after month, you won't be in a good position to make smart choices when your income does inevitably start to fluctuate, and not necessarily for the better. So, if you don't have a budget in place, carve out an hour or so to create one. All you need to do is list your regular monthly expenses, factor in one-time expenses, like yearly membership fees, and compare your spending to your average earnings. If there's room left over for savings, you're in a pretty decent place. If not, you'll need to cut corners.

Of course, an even better way to budget as a freelancer is to take your lowest monthly income over the past 12 months, compare that figure to what you spend each month on average, and reduce your spending in a manner that lets you get by on that number. This way, you'll have a prime opportunity to save during those months when you earn more.

2. Build an emergency fund

We all need cash reserves to protect ourselves from the unknown, whether it's an unplanned medical bill or a sudden home repair. But as a freelancer, you especially need that cushion, since you never know when you might see a drop in income that lasts for months on end. In the aforementioned study, only 37% of freelancers said they could manage an unexpected expense, so if you're missing that safety net, it's time to start building it.

Most people need a minimum of three months' worth of living expenses in an emergency fund. As a freelancer, though, you're better off aiming for six months' worth of living costs or higher.

3. Start establishing a nest egg

If you think you're financially unstable today, just wait until retirement rolls around. At that point, you may not have the capacity to keep working and earning an income, which means you'll need to rely on your savings and Social Security to get by. And while the latter can help you cover some of your bills as a senior, it won't do the trick by itself. Therefore, one additional step on the road to financial security is establishing a nest egg for the future.

As a freelancer, you have several retirement plan options to choose from. You can open a traditional IRA and contribute $5,500 a year if you're under 50, or $6,500 if you're 50 or older. Your money will go into that account tax-free, but withdrawals will be taxed in retirement. You can also open a Roth IRA, which comes with the same annual contribution limits. If you do, you won't get the same immediate tax break, but you'll get to take tax-free withdrawals later on in life.

Another option to look at is the SEP IRA, which allows you to contribute up to 25% of your net business earnings for a yearly maximum of $55,000. And, there's the SIMPLE IRA, which lets you contribute up to $12,500 a year if you're under 50, or $15,500 if you're 50 or older. Both the SEP and SIMPLE IRA give you an up-front tax break for contributing, which means you stand to lower your IRS bill at present.

Finally, you can open a Solo 401(k), which allows you to contribute up to 25% of your net business earnings for an annual maximum of $55,000 if you're under 50, or $61,000 if you're 50 or older. Solo 401(k)s are a handy savings tool for freelancers, but you should know that they can be costly to set up and maintain. They also may not offer the same variety of investments you'd get with an IRA.

No matter which retirement plan you choose, start funding it as early on as you can. This way, you'll give your money a chance to grow over time.

It is possible to get a handle on your finances as a freelancer, even if your income varies tremendously from month to month. And the sooner you do, the less you'll stress over money -- and the more you'll be able to concentrate on whatever work it is you do best.