A freelancer's financial life is much like roller-coaster riding: It has its ups and downs. Occasionally you go off the track, but, usually, you wind up back in the station where you started.
This is especially true for writers at or near my level of success (selling regularly, but mostly to pay-on-publication markets). I earn enough from freelancing to maintain a modest lifestyle, but the income is highly irregular. Budgeting is nearly impossible because I rely on many checks of varying amounts that arrive randomly throughout the year.
For example, on January 14 I had 4 cents in my checking account. The morning of January 20 the kitchen cabinets were mostly bare, I had a stack of unpaid bills almost 2 inches thick, and only a few dollars in cash. That morning I raided my savings account to pay the two most pressing bills. Only 10 days later, my kitchen cabinets are full, all my bills are paid, I've replaced the money I took from savings, and I have a healthy balance in my checking account and cash in my pocket.
Many people live paycheck-to-paycheck--some don't have a choice, others because they've made bad choices--but freelancers living check-to-check when they aren't sure when the next check will arrive and how much it might be deal with a much more difficult financial situation.
Are there ways to to turn the roller-coater ride into more of a train ride (still on a track and still with ups and downs, but at least with a destination in mind and more time to plan for the ups and downs)?
There are many, and here are a few that help me deal:
1) Find steady gigs. In my case, it's a former client that made me a part-time employee. That's two checks a month, for the same amount each time, paid like clockwork. For another freelancer it might be a regular column or a publisher that contracts for a specific number of articles or short stories each month.
2) Find semi-steady gigs. For me it's two clients. One hires me by the hour and cuts me a check every two weeks. Even though the checks arrive like clockwork, the amount varies wildly based on the number of hours I worked during that two-week period. The other pays me a flat rate each week. Even though the amount is the same each week, the checks arrive somewhat sporadically.
3) Produce a lot of a material for as many markets as possible. The more different places there are that owe you money, the more likely it is that one of them will send you a check on any given day.
4) Whenever possible, write for pay-on-acceptance publications.
On the flip side is managing outflow:
1) Pay your bills on time. This prevents late fees and damage to your credit rating.
2) Use credit cards sparingly and pay them off promptly. This prevents interest charges.
3) Build a savings account. The more money you have set aside to deal with emergencies, the less likely it is that a problem or bump in the road will turn into an emergency. (Many emergencies are the result of a failure to plan ahead.)
4) Stock up on non-perishables when you can.
5) Learn to love peanut butter.
I'm sure there are many other ways to deal with the ups and downs of a freelancer's financial life, but doing these things have helped me enjoy the ride. The next time my financial roller-coaster car crests the top and heads down I can throw my arms up and scream with joy rather than grip the steel bar holding me in my seat and quiver with fear.