6 Essential Tools for Managing Your Finances as a Freelancer

manage money as a freelancer

When you start freelancing, you become a boss, marketer, and accountant all in one. It’s overwhelming, to say the least.

If you prefer to focus on the creative aspect of your business, you might not have experience with the financial side of things. But you can’t afford to ignore your money. Keeping careful tabs on your freelancer finances can help you earn more money and reduce stress.

Here are six tools that will help you manage money (and contracts and time) as a freelancer. I’ve included some of my favorites — as well as a few tools I’d like to check out.

6 tools to help you manage money as a freelancer

1. FreshBooks

manage money as a freelancer

Image credit: FreshBooks

An oldie but a goodie, FreshBooks has been my cloud accounting software since I started freelancing.

Its easy-to-use interface helps you track time, send invoices, and import expenses directly from your credit card. Its reports also make end-of-year accounting a breeze. It’s free for up to three clients, $15 per month for up to five, and $25 per month for up to 50.

“I don’t freelance much anymore,” marketer Jess Segraves said, “but FreshBooks was fantastic for billing (and most of my clients used it too).”

FreshBooks is far from the only cloud accounting software, though. Here are some popular alternatives:

  • Bonsai: Relatively new to the scene, Bonsai costs $19 per month for a suite of services that includes contract creation, e-signing, time tracking, and invoicing.
  • Wave: Wave is free for invoicing and expense tracking, with extra fees for payroll and credit card processing.
  • Harvest: Harvest is free for two projects and $12 per month for unlimited projects. Most famous for its time tracking, this app also offers accounting functions like expense tracking and invoicing, similar to the other software on this list. Writer Dana Sitar uses it to collect payments.
  • QuickBooks Self-Employed: Travel blogger Stephanie Zito called this app “Tinder for expense tracking” because it lets you swipe right for business expenses and left for personal ones. “My finance life is better than my dating life,” she joked. It also lets you track mileage, create invoices, and calculate your quarterly taxes. It costs $10 per month.

2. Digit

financial management for freelancers

Image credit: Digit

When Digit announced it would begin charging a monthly fee of $2.99, I closed my account. Then, a few weeks later, I reopened it.

Why? Because saving money as a freelancer is hard. With an unpredictable income, you can’t schedule automatic transfers — say, $100 every month — because what if it’s a lean month and you don’t have enough?

That’s why I love Digit. It uses an algorithm to analyze your bank account and calculate safe amounts to transfer to savings. You’ll often see multiple withdrawals per week for anywhere from a few bucks to nearly a hundred dollars. If you happen to overdraft, Digit will cover the fees.

Don’t want to pay a monthly fee? Give Qapital a shot. It allows you to create rules that trigger automatic savings. For example, every time you make a Sephora purchase (guilty pleasure), you contribute $10 toward your retirement account.

3. Acorns

manage money as a freelancer

Image credit: iTunes

Although I love Digit for saving for emergencies and fun stuff, I’ve considered signing up for Acorns so I can save for retirement more easily (because, hello, we freelancers aren’t getting pensions in our golden years).

After you sign up with Acorns and connect your credit or debit card, it rounds up the “change” from every purchase and puts it into an investment account. For example, if you spend $23.56 on dinner, Acorns will invest 44 cents.

It’s not a lot, but it adds up. By setting aside $5 every few days, you could invest close to $1,000 in a year. And by retirement time, that number will have grown exponentially.

For college students, it’s free. For everyone else, it costs $1 per month.

4. HelloSign

manage money as a freelancer

Image credit: HelloSign

The only way to get paid as a freelancer? To fill out your W-9s and sign your contracts.

I don’t know about you, but even if I had a printer and scanner, I’d rather do that stuff online. Enter HelloSign.

It syncs with Gmail, allowing you to open documents directly in the platform. All you have to do is pop in your signature and the date, and then, boom, you have a legally binding document.

It’s free for up to three documents per month or $15 per month for unlimited documents.

5. Painless1099

manage money as a freelancer

Image credit: Painless1099

Taxes are one of the hardest parts of running your own business. Since nobody’s taking them out of your paycheck, you need to do it yourself.

The problem: It’s hard to remember and even harder to calculate how much to set aside.

Painless1099 takes the guesswork out of the process. You funnel your earnings into its “smart bank account.” Then, based on your info, the platform withholds a certain amount for taxes and deposits the rest into your personal checking account.

When it’s time for quarterly estimated taxes, it even allows you to make payments directly to the IRS.

Painless1099 charges 0.35 percent of each deposit you make into the smart bank account, which it estimates comes out to $8 per month for most users.

The other caveat? It doesn’t track your business expenses, so it might withhold more than necessary sometimes. But since freelancers generally don’t have much overhead, it shouldn’t be a big problem.

And overpaying is better than having an enormous bill at tax time, right?

6. Cushion

financial management for freelancers

Image credit: Cushion

Another tool I hadn’t heard about until recently — but think is pretty cool — is Cushion. Designed by freelancers, its aim is to help you manage your fluctuating income and time.

With regard to income, let’s say you want to earn $50,000 over the year. Instead of remaining static, Cushion automatically readjusts your monthly goal based on whether you earned more or less in the prior month.

It also allows you to set more than one financial goal. So, you could have a “must earn this much to pay my bills” goal plus a “here’s what I’d love to earn” goal.

Time wise, it helps you manage projects over the long-term by letting you easily visualize when you’re overbooked and when you’re free.

Like other tools, it allows you to track your time and send invoices. It costs $5 per month for up to five clients and five invoices per year or $10 per month for the unlimited version.

Still overwhelmed by the challenge of managing money as a freelancer? Here are a few posts that might help:

And if you’re looking for something that will help you manage your overall financial health, freelance writer Jamie Cattanach called Mint a “godsend,” and travel writer Mike Sowden said You Need a Budget is “brilliant.”

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