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Anyone considering freelancing will hear dire warnings from those in the business about the dangers of feast and famine – and the lack of paid leave if anything happens to you or a loved one. However, freelancers don’t have to live on a financial knife-edge. There are common sense steps you can take to protect yourself and your dependents.

Plan for the Future

Unless some miracle occurs in the economy, realistically, it’s likely to become ever more difficult for to survive solely on a state pension alone when you reach retirement.

This means that it falls on you to ensure you have sufficient savings and investments to help you survive – and hopefully thrive – in retirement (if you ever retire; with the retirement age rising at the current rate, retirement may become obsolete!).

If you have a healthy pension from any previous or current employment, it may be worth investigating if you could carry on making contributions to it (or make additional contributions, if you’re still employed part-time). If not, then you need to investigate your private pension options – and you need to do it SOON, however youthful you may be. The later you leave it, the bigger the amount of money you have to save every month to accrue a halfway decent pension, and the fewer years of interest you’ll earn.

Plan To Keep as Much of Your Earnings As You Can

A good accountant can make sure you keep as much of your hard-earned money as possible and can advise you on how to make those earnings work for you, too. But whether you have an accountant or not, give yourself the best chance of keeping that money from the taxman by keeping and filing all your receipts for business expenses, however small, and by educating yourself about what you can claim against tax.

Plan for Emergencies

If you’re not earning much and/or you’re skipping through life healthily, with an equally healthy family, relationship and house, it may seem unnecessary and financially uncomfortable to put money aside.

However, it really IS a good idea. None of us can tell what’s round the corner; if some accident befalls your house or your partner becomes very ill, it can become extremely difficult to maintain your freelance career. How many weeks or months could you survive with no income?

Consider taking out insurances to cover you and any dependents in the unfortunate event of critical illness, accidents or the development of long-term health issues – and/or have an emergency fund so that if disaster strikes, you don’t have the added worry of wondering where next week’s food will come from. It goes without saying that you should have house and life insurance too.

Plan for the Feast and the Famine

Unless you’re very lucky, there will be times when the work isn’t exactly flowing in. No matter how good you are at what you do, nothing can protect you from the effect of events such as a major, regular client going bust or deciding to move your workload in-house.

It can take time to attract new clients to fill the void and even when you do, they may not be providing regular work. So try and keep at least three months of basic, survival-level living expenses in an account where your money is easily accessible (if it can earn you some interest while it’s sitting there, all the better).

Of course, the best time to put money away against the possibility of famine is when you’re in a period of feast, so next time you get one of those high-paying jobs that puts a smile on your face, resist the temptation to blow it all on a week in the sun or a whole new wardrobe. Treat yourself to a short break or a handful of items you love instead, and put the excess in your famine fund!


Nobody wants to imagine the worst, think negatively about future work prospects or keep a leash on their spending when they’ve worked hard for their money. However, these common sense steps could give you the financial security that can be hard to come by when you’re a freelancer.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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