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Tech Career Insights: How to Stay Financially Sane as a Freelancer
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How to Stay Financially Sane as a Freelancer

07 March 2019, by Luke Venter

Being a freelancer is great and it comes with tons of freedom, like working whenever and wherever you like. But, this flexibility comes with a price. There is always the risk of not having work for a month or more. We need to be prepared to carry on operating normally when those months do come around. To stay on my toes, I need to properly manage my personal finances by keeping my fixed costs low, charging fair rates and planning ahead. Here’s how I do this.


Some months are so good that I don’t have enough time to allocate to all the projects I’m interested in. When I have to turn work down, I can easily trick myself into believing that all months are going to be this way. Humans have a tendency to think that, when things go well, they’re going to keep following this trajectory. But having a realistic view that you could have a bad month, like December when all your clients close down, is key to keeping yourself out of a financial pickle.

I realised that I needed to set myself up so that I could be prepared regardless of work availability. So, I decided to skill up in the area of personal finance so that I could figure out the best way to avoid financial anxiety each month. Anxiety and creativity cannot co-exist because your decision-making will be hampered, not by what you want to do or what you feel is important, but by what will make you money the fastest. On top of this, I feel like I need to contribute towards giving my family everything we need, and a lack of financial security doesn’t exactly create a stable environment.

In this article, I will discuss how I manage my personal finances so that

  • Freelancing works for me,
  • I’m able to have the freedom to work whenever and wherever I want, and
  • I can minimise the risks that come with the freelancing lifestyle.

Keep fixed costs low

Your personal income is one of your biggest wealth building tools. If a massive portion of it immediately leaves your account every month, you lose the ability to save money for months that are a bit slower. This downside means spending money on fixed costs, like car payments, credit card repayments, software subscriptions and other costs, instead of actually saving for slower months or other things, like holiday trips or generosity towards a friend or family member.

Unnecessary personal expenses

My wife and I used to live in this large apartment with so many things that we simply didn’t need. When I had to pay the rent each month, it was such a thorn in my side because it was disproportionate to our monthly income which, in turn, prevented us from using our money for other things we needed or wanted. So, we looked at our budget and the massive apartment that we had, and we decided to move into a one bedroom place that’s just the right size for us. This wasn’t as difficult as I expected, because we’re hardly at home anyway and we just didn’t need that much space.

This freed up so much of our monthly income that we could now:

  • Allocate it to savings,
  • Weather any rough months,
  • Focus on giving to important causes, and
  • Do other things that we wanted to do, like going on holiday.

The key here is that we decided what to do with our money. It wasn’t decided for us by landlords, banks or other institutions. This ability to choose is important to me because it’s money that we earned through our own hard work. If you view money as one of your tools, it isn’t useful to have someone else decide how you should use your own tool.

Company expenses

As a freelancer, part of the magic is that I can work where I please. The worst thing a freelancer can do is rent an office - for what? An office is just so expensive, and I really don’t want to be tied into those fixed expenses or that fixed location.

Instead of spending a few thousand rand on rent each month, I put aside some money to buy one coffee a day so that I can work anywhere I choose. Starbucks is always a win for me: great internet speed and no one bothers you every five minutes to ask if you’d like another coffee. Not to mention that changing my environment every now and then can do wonders for my creativity!

Day-to-day expenses

In the day-to-day, I have to be very careful about where I spend my money. As a freelancer, you’re often working in coffee shops, and it’s very easy to spend money on lunch every day. This can get very expensive. So I focus on being really disciplined on the food front. Otherwise, the measures I’ve taken to work in a coffee shop, instead of an office, doesn’t actually end up minimising my expenses. I find that eating food from home is way cheaper in the long run.

Since I work at Starbucks most days, I know they won’t chase me out if I don’t buy anything but, on principle, I feel like I should. So, I just make sure that I don’t buy the most expensive item on the menu which means I usually buy an R18 filter coffee. This works for me because I’ve budgeted for it and I know that I can afford it. If you can’t afford it, then the reality is that you should probably work from home until you have enough resources.

Speaking of resources, make sure to monitor the software that you’re paying for and evaluate whether you actually need it. I used to have:

  • An accounting software subscription,
  • A subscription to Adobe Creative Suite,
  • A premium Github subscription,
  • A meeting minutes tool subscription,
  • An email client subscription and probably a few more that I can’t remember.

When I signed up initially, I thought that $9 wasn’t all that much. What I hadn’t realised was that $9, multiplied by a few times a year for a few different pieces of software, can take a real chunk out of my monthly income.

To determine whether something is worth spending my money on, I consider two main things:

  1. Is this directly-related to my productivity and line of work?
  2. Is there no other free solution that can solve this problem for me?

If the tool greatly contributes towards my productivity and will actually save me money at the end of the day, then it’s worth it! For example, I currently have a $12 subscription to a time-tracking and invoicing tool called Harvest, a R100 subscription to a virtual phone line, and a budgeting tool that I paid for once a few years ago. These services are directly related to my productivity, so they are worth spending some extra money on.

As software developers, we are have the advantage of being able to get open source software that can run on our own servers. There are some great open source CRMs and accounting software options that you can download, host yourself and even manipulate if you’d like. So when I don’t have the money, I need to spend the time instead, and spending a few hours setting up an open source system will definitely pay off down the road. Where I used to spend money, I’ve now found other free tools that fulfil the functions that I need to get done.


  • Don’t rent an office space.
  • Don’t drive a car that has a big monthly expense, rather try buy one with cash.
  • Live in a house that’s just the right size.
  • Pay attention to the software you’re paying for, and figure out if you actually need it.
  • Don’t spend money you don’t have. If you can’t afford it, don’t buy it - this includes cars!

Charge what you think your time is worth

When I first started out in the freelancing space, I charged way too little. I thought that I couldn’t charge all that much because I didn’t have a computer science degree and a lot of experience. As the projects went on, I realised that I could pull my weight, and that I was charging a lot less than people were willing to pay. When I had a steady flow of work coming in, I finally had the freedom to take the risk, and I increased my hourly rate. To my surprise, nobody batted an eyelid. They were perfectly fine to pay the new rate that I was asking for because they felt that my skill-set was worth it and that I was meeting their need within their budget.

For me, it’s important to charge a proper fee, because it’s really hard to stay motivated if I feel like I’m working for too little. On top of that, developers have really unique skills that are hard to learn and maintain which means that we’re worth a lot!

Calculating my rate wasn’t an exact science, but rather involved getting a feel for what people were willing to pay for someone with my skills. Talking to my friends who were also freelance developers also helped because they were able to tell me what an hour of my time might be worth based on their earnings. Since they had been in my position before and had already learnt the lessons, they could share their learnings with me which I’ve been very grateful for!

Plan ahead

Knowing what you need for the month is important, because you need to have an earning goal to strive for. But, it can’t just be some arbitrary figure that will leave you shooting in the dark.

Make sure that you have a goal!

At the start of each month, my wife and I draw up a budget for the month ahead. We draw up a new budget each month because not every month is the same for us. We find this useful because, if we don’t track our spending, it will definitely get out of control. Money is a tool, so we need to make sure it’s being used effectively to achieve the purpose we’ve set for it.

It’s also really important to know where our money is going. I use a very old piece of software called You Need A Budget (YNAB). When I purchased the software, it was a once-off expense, but now it’s a monthly fee which isn’t ideal since it’s far less effective to have a portion of your income go off every month rather than to save and spend that money once off. This software is still worth it though, because helps me plan for the month ahead and keep track of what I’ve spent in the past. That way there are way fewer surprises, and I can make sure I’m on budget each month.

In conjunction with this, I also use 22Seven to accumulate all my transactions, so that I can make sure I’m not missing any when I set up my budget. Every morning I log each transaction from the previous day and see how we’re doing against our planned budget. If you don’t do this, transactions can quickly get out of hand, which is bad because you can easily lose track of where your money is going. You might think that you won’t lose track but you will because humans tend to think things are going better than they are especially in the area of finances. I don’t use 22Seven for the budgeting tools, just the transaction feed, because it’s really clunky and, to be honest, I’m just not quite sure how to use it properly.

If you operate this way, you can be free from constant financial anxiety which just kills creativity and limits your ability to make your money work for you. You want to be able to take your spouse out, buy gifts for your family, go on holiday, or give generously where you see fit. What you don’t want is for your money to be swallowed each month because you’re paying off nonsense you don’t need, or trickling away because you aren’t keeping track of it.


One absolutely life changing book which every person should read is called Total Money Makeover by Dave Ramsey. It’ll change the way you view money for good!

Some tools that I recommend are:

  • Harvest for time tracking.
  • GitHub (with unlimited free private repositories).
  • Figma for graphic design - It’s free and works in a browser.
  • Adobe XD - Free and works well for quick mock-ups and graphic manipulation.
  • VS Code - Free code editor.
  • Most Google products - Docs, Hangouts, etc. They’re free and work great!

For open source tools, you can take a look at these:

Luke Venter is a husband, optimist and someone who believes that South Africa is perfectly positioned to be a place that produces world-changing ideas and technologies. He has his a master’s degree in Architecture, but decided that code was more fun than concrete. The theme of his career so far has basically comprised of having a need, finding out the best framework to use to meet that need, applying that framework, and then using it in future projects to expand his skill-set and knowledge as he goes.


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