How to set up your own payday as a freelancer

Written by Sarita Harbour

Monday, February 12th, 2018

When I became a professional writer, I loved the freedom, challenges, and rewards of a freelance career. Yet I missed the steady paycheque that accompanied my banking career... at first. But I found a way to set up a regular payday routine, which helped my freelance cash flow and household budget operate much more smoothly.

Why setting up your own payday helps with budgeting

As a freelancer, unless all of your clients are on contracts with set payment dates, your "paydays" are all over the calendar. However your bills aren't. Regularly scheduled bills show up at the same time every month, whether your client paid you last week or this week. If you know your typical bill payment schedule, you can have payments from clients going into one account and set up a regular payday to move money from that account to a separate personal account in order to help you plan your monthly budget, reducing the likelihood of missed payments.

Don't forget your taxes

If you aren't on a company payroll, you're responsible for collecting and submitting your own taxes. I find it easiest to estimate my tax bracket for the year, and to divert a percentage of each payday amount to the savings account I've earmarked for taxes. I do the same thing with any sales tax I've collected.

Setting up regular billing/invoicing

Setting up your own payday is easier with a billing routine. I invoice clients on the last business day of each month, sending invoices directly from my accounting software program. Invoicing on a weekly or bi-weekly basis may better suit your situation, but whatever cycle you use, it's a good idea to invoice regularly.

Why automatic emergency savings are especially important for freelancers

I'm a big fan of automatic savings — pre-set withdrawals from your bank account directed to retirement, education, or other savings. It's particularly important for freelancers to save automatically to a rainy day fund, because we often don't have steady income. Projects end and income streams may dry up unexpectedly. Set up your payday to save automatically to a rainy day fund so you'll have money to live on if your freelance cash flow becomes a trickle or suddenly disappears.

Setting up your own regular payday helps keep you on track with your budget and savings, and can help smooth out the income inconsistencies that often accompany the self-employed life.

Share now

Learn about Tangerine’s no-fee daily Chequing Account that pays interest.

Learn about Tangerine’s options for spending that put you in charge.

Related posts

Money Mistakes I've Made While Being at Home
Money Mistakes I've Made While Being at Home
February 9th, 2021 | Maria Hyde
What Happens If You Miss A Credit Card Payment?
What Happens If You Miss A Credit Card Payment?
January 21st, 2021 | Kelley Keehn
Managing Finances After a Recent Separation
Managing Finances After a Recent Separation
December 3rd, 2020 | Dominique Jarry Shore
Legal Stuff
This article or video (the “Content”), as applicable, is provided by independent third parties that are not affiliated with Tangerine Bank or any of its affiliates. Tangerine Bank and its affiliates neither endorse or approve nor are liable for any third party Content, or investment or financial loss arising from any use of such Content.
The Content is provided for general information and educational purposes only, is not intended to be relied upon as, or provide, personal financial, tax or investment advice and does not take into account the specific objectives, personal, financial, legal or tax situation, or particular circumstances and needs of any specific person. No information contained in the Content constitutes, or should be construed as, a recommendation, offer or solicitation by Tangerine to buy, hold or sell any security, financial product or instrument discussed therein or to follow any particular investment or financial strategy. In making your financial and investment decisions, you will consult with and rely upon your own advisors and will seek your own professional advice regarding the appropriateness of implementing strategies before taking action. Any information, data, opinions, views, advice, recommendations or other content provided by any third party are solely those of such third party and not of Tangerine Bank or its affiliates, and Tangerine Bank and its affiliates accept no liability in respect thereof and do not guarantee the accuracy or reliability of any information in the third party Content. Any information contained in the Content, including information related to interest rates, market conditions, tax rules, and other investment factors, is subject to change without notice, and neither Tangerine Bank nor its affiliates are responsible for updating this information.
Tangerine Investment Funds are managed by Tangerine Investment Management Inc. and are only available by opening an Investment Fund Account with Tangerine Investment Funds Limited. These firms are wholly owned subsidiaries of Tangerine Bank. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.