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4 Tricks I Use to Save Money as a Freelancer

by Maurie Backman | April 2, 2019

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Woman taking notes at desk.

Image source: Getty Images

As a freelance worker, I enjoy my share of perks. For one thing, I get to set my own hours and take time off from work as I please, which means that if I suddenly get the urge to hit the beach or disappear for a walk in the woods in the middle of a workday, I don't need to ask anyone's permission to do so. I also get to work from home, or from whatever city I happen to be traveling to. And I get to choose what assignments I take on, thereby avoiding scenarios where I'm trapped at my laptop feeling frustrated and bored to tears.

But there's a drawback to being a freelancer, and it's that my income is by no means steady or guaranteed. I might have a month where I do fairly well, only to earn half as much in the month that follows. Because my income varies significantly, I need to be careful with how I spend money. I also need to make a concerted effort to save money -- something that might come a bit easier to folks on a salary. Here's how I manage to pull that off.

1. I keep my housing costs low

Housing is the typical American's greatest monthly expense -- and it's certainly mine. That's why I made sure not to take on the highest mortgage I qualified for. By limiting the extent to which I spend money on housing, I'm able to free up cash for other purposes, whether it's retirement savings or my kids' college funds. I also have an easier time replenishing my emergency fund when I'm forced to dip into it.

2. I avoid credit card debt

Not only is credit card debt bad for your credit score, but it's also costly. Friends of mine who carry credit card balances pay hundreds of dollars a year in interest alone. That's why I made a policy long ago to never charge more on a credit card than I could afford to pay off by month's end. Doing so has helped me avoid throwing away money on interest, and that's cash that's instead gone into savings.

3. I follow a budget

It's pretty hard to save money when you don't know where yours is going month after month. That's why I set up a budget for myself as soon I got my first job. Of course, that budget has evolved numerous times as my circumstances have changed, but by having one in place, I'm able to keep my spending in check in categories where I might be tempted to overspend -- think dining out, leisure, and even good old coffee.

4. I pay myself first

This is perhaps the single most influential factor in enabling me to save. Before I spend a dime of what I earn, I transfer a portion of my income into either a savings account or a retirement plan. Now, because my income varies, the amount I'm able to save each month follows suit. But I do have a minimum that I require myself to save each month, and I don't let myself spend anything until that minimum is met.

Saving money is not an easy thing to do. Trust me -- I'd rather have more cash to spend on delicious takeout, fun outings with my family, and kitchen gadgets (they're one of my weaknesses) rather than send my hard-earned money into a savings or retirement account where I can't touch it. But here's the thing -- if I don't save that money, I know I'm going to struggle in retirement, or flip out when an unplanned bill comes my way. I'd rather avoid those scenarios and do the responsible thing -- even if it means making some sacrifices along the way.

These savings accounts are FDIC insured and can earn you 12x your bank

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Two top online savings account picks

Rates as of Dec. 29, 2020 Ratings Methodology
Logo for CIT Bank Savings Builder
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CIT Bank Savings Builder American Express® High Yield Savings Account
Member, FDIC Member, FDIC
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Open Account

On CIT's Secure Website.

Open Account

On American Express' Secure Website.

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APY: Up to 0.45%

APY: 0.50%

Best For: No monthly maintenance fee

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Min. to earn APY: $0

About the Author

Maurie Backman
Maurie Backman icon-button-linkedin-2x

Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.

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