As I write this, my son is playing with his Lego while watching Paw Patrol for the hundredth time. We just had lunch. I cooked his favorite chicken nuggets. A few hours from now, we’ll pick up Mommy from the office and grab a dinner outside.
Hunkered down while typing on the dining table, I can’t help but feel blessed for this wonderful set up. See, I’ve been working from home full-time for a few months now, and I’m absolutely loving it. It has been a leap of faith to be honest, and one that I’m happy to have taken.
However, without a steady pay from an employer, key adjustments had to be made especially when it comes to budgeting. Freelancing is awesome, as long as you have a steady stream of work coming in. That’s why it’s crucial to make sure there’s always money flowing in, and more importantly, know how to manage it properly.
Here are some of the best budgeting tips I learned while working as a full-time freelancer.
 Determine Your Baseline Budget. The first month I went full-time freelance, I calculated our monthly expenses. I wanted to determine how much exactly our family needs to survive on a monthly basis. This will serve as my baseline for my minimum target income. Once determined, I made sure that I hit the minimum amount and budgeted the rest according to our monthly additional expenses.
 Learn How to Track and Manage Your Time Properly. My job as a copywriter usually depends on output, not on hours logged. It will be a good idea though to follow some sort of time-tracking method to increase your productivity and results. I use the Pomodoro Technique, wherein I work in 25-minute increments with a 5-minute break in between.
Why do this? I found out that by knowing how to correctly estimate the time it will take to work on a project, you’ll be able to properly quote your rate to your clients. Also, it allows me to schedule my day accordingly since I have a better idea of how much time I’ll need to work on something. The result? More productive hours which translates to more pay. More pay equals more flexibility in our monthly budget.
 Set a Monthly Income Goal. One of the advantages of working freelance is the unlimited income potential. Instead of having a fixed salary, your earnings are highly dependent on your output. To me, this is a good thing. It inspires me to set lofty budget goals which helps me focus and commit to improving my work and productivity. By setting a target monthly income, you stay laser-focused in your work and in your financial goals which in turn expands your budget for future expenses.
 Learn the 50/30/20 Rule. This acts as a simple formula for allocating your budget. Under this model, you get to spend 50% on the most important stuff: food, rent, utilities, insurance, etc. The 30% goes to the things you want to have: dining out, gym membership, travel, new books or gadgets. The last 20% will go to “paying yourself,” it will be used for savings, insurance, debt payment, and the like. The beauty of this concept is that it allows you stick to a tried and tested budgeting plan that is easy to follow and doesn’t force you to deprive yourself of enjoyment.
 Track Your Expenses Properly. Knowing where your money goes and how much is being spent on specific things is the first step to an effective budgeting plan. Also, by knowing which of your extra expenses eat up most of your income, you’ll be more conscious about it and craft a strategy on how to minimize it.
 Set Up Multiple Savings Accounts. I opened a savings account for the sole purpose of receiving client payments. This is the one I use to receive local payments. I also have a PayPal account specifically for receiving pay from clients who prefer that service. These are of course aside from our family’s main savings account which we never touch except for emergencies.
Why have multiple accounts open? Why not simply use my existing savings account for receiving client payments? Two things: safety and convenience. Whenever I need to withdraw my earnings, I just need to visit the nearest ATM. I don’t need to risk bringing our savings ATM card whenever I need to withdraw. And here’s the best part, it allows me to have a dedicated “payroll” account that I can easily audit and not confuse with existing money.
 Use Apps That Help You Budget Money. There are tons of SaaS (Software as a Service) and smartphone apps out there that make budgeting (and client invoicing) easier and fun. Popular ones include Freshbooks, Quickbooks, and Mint. You can also install GCash or Paymaya and enjoy the benefits of cashless transactions. Even a simple MS Excel spreadsheet with a breakdown of your monthly and daily expenses work wonders in helping you stay on track with budgeting.
 Work for Something You Want. Back in my student days, I skipped the occasional merienda if there was something that I wanted to buy. Today, I told myself that if I wanted to buy something, I have to work for it. How does this work? For example, a new wireless mouse and keyboard are not actual necessities. While I do have the extra money to spend for these things, I realized that disciplining myself to work for luxury purchases achieves two things. First, it makes me think twice if the item is something I truly want, after all, I have to spend my free time on it. Second, it motivates me to be productive instead of binging on Netflix marathons on weekends. An extra 2-3 hours of work to buy some stuff I want is not a bad trade-off compared to staying lazy doing unimportant stuff.
Working from home is awesome. You can say goodbye to traffic, noise, pollution, flood, and all the hassles that come with working the regular 9-5. You get to spend more time with family, save on expenses, and manage your time whichever way you want to.
But with this freedom, comes great responsibility. For freelancers out there, you have to be extra mindful of your finances, especially now that you don’t have the safety net of a steady pay. Use these tips to help you stay level and reach your financial goals faster.
The article was written and submitted for publication (as guest post) by Amiel Pineda. He is the sole publisher for Home Based Pinoy, where he writes various in-depth guides for aspiring freelancers.