The Rules of Freelancing #3: Save, Save, Save!

I'm talking about money here. Freelancers and the IRS have a complicated relationship. Every year, my tax forms keep growing in size, whether I've had a good year or not. Saving money not only for those estimated tax payments but also for an emergency fund is key to maintaining your sanity.

This rule I follow as much as I can, but when I have a lot of money, I usually decide to go and do a grownup thing, like buy a car. I bought my little yellow bug a year ago (with a hefty down payment that dwindled the savings account), and by November 2011 I had lost a great gig. I didn't find steady work again until March, and during that little hiatus, I was sick twice, which added to the bills and now the savings account is just above empty. I'm now in financial convalescence in the guest room at my parents' home instead of my two-bedroom apartment. Or New York. Or any other place I could imagine myself living it up without my parents asking me when I'm coming home.

Take from me, although I find a few certain television financial TV experts annoying, when they say have an emergency fund, DO IT.






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**Bonus Tip: Don't Count on It
This may seem harsh, but until that money is in your bank account, don't count on ever seeing it. A lot of freelancers have to deal with delayed or nonpayment of services. Make sure you aren't paying your bills with the idea of getting paid on time.

If you need my example of the crazier things that can happen with money in this business, two weeks ago I finished a job, but because of circumstances out of my control, I found out I may have to wait up to 60 days OR MORE to get my money for completing the project. Unfortunately, I was counting on that money to pay bills because the project was through a site where payment is guaranteed, but at the discretion of the client's timetable—and the website gives the client a pretty big timetable. Instead, I had to work 12-15 days in the last week with companies I already knew would pay me on time to make up for what I thought was going to be a nice paycheck. Guess I'll get a surprise two months from now.