7 Money Moves Every Freelancer Should Make

As a freelancer, your financial situation can look different. Find out how to prepare.

If you're new to freelancing or are thinking of making a career switch, you're likely excited at the possibility of a different work situation. Many workers become freelancers because they value flexibility, independence, and freedom.

But similarly to a regular job opportunity, it's essential to consider how your finances might change when you take on a new work opportunity. By taking the time to do this, you can adjust some of your financial habits and make a plan, so your finances are in order.

Here are some money moves you should consider making if you're a freelancer.

1. Talk to an accountant

If you're new to freelancing, speaking with a tax professional is worthwhile. An accountant can help ensure you're financially ready for the career change you're about to make.

They will be able to guide you toward making appropriate financial choices -- such as helping you understand how much money you'll want to set aside for freelance taxes.

Plus, they can be a valuable resource when it comes time to prepare and file your taxes.

2. Plan for days off

There will be some days when you don't feel like working, are too sick to work, or want to take time off for a vacation. When you're a freelancer, you must plan for days off.

Unlike a traditional salaried worker with paid time off, you won't get paid when you take time off. That's because you only get paid for the work that you do.

Instead, you can plan and save to have money available if you need to step away from your work responsibilities. The last thing you want to do is worry about money while you're trying to recover from an illness or spend time with loved ones.

3. Automate your savings

No matter what savings goals you're working toward, it can be beneficial to automate the savings process. Doing this will ensure you stay on top of your goals. As a freelancer, this is especially helpful because life can get busy when you're managing your own business.

4. Make quarterly tax payments

As a freelancer, you're self-employed, meaning you're responsible for setting aside and paying your income taxes. It's a good idea to get into the habit of saving money regularly and making quarterly tax payments. By doing this, you can avoid paying penalties. It may also sting less to make quarterly payments rather than sending off one huge check on an annual basis.

5. Track your business expenses

It's also a good idea to track your business expenses throughout the year. Eligible business expenses are tax deductible, which can help to reduce your tax liability. Staying organized and having detailed records can save you time and minimize stress.

6. Don't neglect the expense of health insurance

If you want to have health insurance coverage, you should do your research before becoming a freelancer. If you can't hop on a partner or spouse's plan, you'll need to buy a policy, which may cost more than you realize. Compare policy options and check to see if there are any opportunities to lower your premium without sacrificing benefits.

7. Keep track of your time

Some freelancers charge an hourly rate, while others charge project-based fees. But regardless of how you're paid, it can be beneficial to track how long it's taking you to complete tasks so you can make more informed decisions about what projects you take on.

As a freelance writer, I'm paid a per-project fee. It has greatly benefited me to keep track of how long certain types of projects take me to complete. By doing this, I can adjust my workload and focus my time and attention on projects that provide me with the highest overall earnings.

Are you charging project-based rates? Don't focus on the dollar amount without considering the work involved. Some projects may pay a higher rate, but they could require a lot more work.

Your finances should remain a priority

By making the above money moves, you can better manage your finances while navigating being a freelancer. The freelance life works for many people and could be an excellent choice for you. Make sure you consider how your finances will change in your new role.

For additional money management tips, look at these personal finance resources.