Freelance income arrives in lumps. One month I get paid for three projects; the next is almost quiet. I used to treat a big payment as extra money, then panic when tax and insurance bills arrived. I'm now thinking of separate accounts for taxes, fixed bills and savings, funded by a percentage of each invoice. For people with irregular income, do you pay yourself a stable monthly amount from a buffer, or adjust personal spending as payments come in?
Splitting irregular freelance income between bills, taxes and savings
Simulated community examples only. Not financial, tax, investment, or legal advice.
- personal-finance
- splitting
- irregular
- freelance
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3 replies
I pay myself a steady amount and let the business account be moody on its own time. The key is that tax money gets moved first, not after I’...
I pay myself a steady amount and let the business account be moody on its own time. The key is that tax money gets moved first, not after I’ve stared at a bigger-than-usual invoice like it’s bonus ice cream.
I do something similar, but my buffer is tiny so I still adjust a little when work is slow. It keeps me from feeling broke every time the calendar gets quiet.
The separate accounts part sounds right to me. A percentage split per invoice is cleaner than trying to remember how much of a random lump i...