Cash Flow

Your cash flow when you work for yourself can vary dramatically from month to month. Understanding your cash flow and finances is even more critical when you are self-employed. Make sure to educate yourself.

Uneven Cash Flow

Make sure to have an emergency fund. Everyone should have emergency savings, but it is even more crucial if you are doing business on your own and don’t have a traditional paycheck from an employer. Every freelancer should understand and be fully aware of their cash flow for things like medical issues – where you can be out of work for several months. Understanding taxes for the self-employed, a full-time freelancer, or full-time side-hustler is extremely important or you could end up paying income taxes in lump sums, rather than through employer withholding. In every case, having an emergency fund helped them make it through tough financial times.

How much do you need? That’s a tricky question. Setting a budget and calculating your net worth will help you figure out the numbers. Most financial planners suggest anywhere from three months to a year’s worth of living expenses, depending on the circumstances of your life.

Take into consideration all the uncertainties. If you’re young and single, you’ll need less than if you have young children and you’re the main breadwinner. Medical emergencies, emergency home repairs, or automobile issues need to be considered. Set a number by taking into consideration these things.


A healthy emergency fund and a budget are extremely necessary if you want to be comfortable as a freelancer. Making a budget helps you spend and save correctly.

Spend some time learning about budget basics and your net worth.

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