Some students spend their earnings on everyday needs while others (like me) have allowances being sent every two weeks to cover most of the major expenses (especially food and transportation). This leaves my freelance earnings in my bank account at my disposal.
Obviously, the earnings received from freelance work can be spent on almost anything my heart desires. I get to buy clothes, shoes, accessories, better food, and can even treat my friends out to pizza every week!
Having disposable income from freelancing is a dream come true, right? Far from it. As student freelancers, we need to remain responsible with our expenses and must learn how to budget our freelance earnings. In this post, I’ll explain how to accomplish that.
Responsible Students, Responsible Freelancers
It’s so easy for money to slip away from our wallets and to disappear from our bank accounts when there’s no one to support and no one to limit how we spend our personal finances. With no one but yourself to control where the money goes it’s very possible that after receiving two months’ worth of earnings, your account becomes empty in a matter of two weeks.
Believe me, I know how it feels to be ecstatic about finally receiving money after months’ of writing for clients and then return back to square one after only two weeks’ worth of dining out, buying clothes, buying more stuff online, and the like.
Budgeting for Future Investments
It was a nightmare being caught inside this spending cycle, but after experiencing a lot of hardship due to bad spending habits, I decided that it was time to cut back on the unnecessary expenses and to actually save.
Aside from the usual future investments such as a car or a house, I focused on saving for other things that I would like to buy for myself such as a laptop for better freelancing, a mobile phone since my old one was utterly falling apart, and things for my family since I usually go home during holidays and breaks from school. But, I knew this was just going to be like those unresolved resolutions we make every New Year’s, so I decided to take action and actually implement a system that will keep me from making a beeline for the ATM machine during a sale.
Budgeting Tips that Worked for Me
Here’s what I did and what I’d like to share with student freelancers all over the world:
- Make two separate lists. On one list put all of the things you are required to spend money on such as rent, food, water, small groceries, and school-related expenses. The second list should be composed of things you would like to buy in the future and that you must save to obtain.
- Save money. Once you receive your freelance earnings, 50% to 60% of it should stay in your bank account. This money is for the things on the first list, while the other 40% to 50% will be yours to spend or to save for the things on the second list. If you are not receiving an allowance from your parents, 70% to 80% goes to things on list #1 and 20% to 30% is either for your personal wants or for the things in list #2.
- Schedule your spending. Only spend money one day a week or one day every two weeks. Limit yourself to X amount of freelance earnings for splurging. Every freelancer, whether a student or a professional, needs a pat on the back and a reward for all his hard work so treating yourself with what you love to eat or do is necessary. Just make sure that you only spend a percentage of your earnings and only for one whole day.
- Basic budgeting 101. List all of your expenses at the end of the week. See if you can cut down on certain expenses that went over your initial budget. Determine whether you were able to save an extra amount of money that you can return back to your savings account.
- Keep working hard. Continue doing a good job both in school and in your work as a freelancer. The more you learn and get good grades, the more you become valuable to your future clients and employers.
The more you work and do a good job at it, the more you will earn and the more your freelance clients will want to keep you on their team.
Of course, different students live different lifestyles, so these tips won’t work perfectly for everyone (especially for those who live and spend differently than me). But, these tips are focused on saving and budgeting, don’t hesitate to give them a try as they might be the key to finally saving and budgeting your earnings significantly.
So far I’ve shared budgeting tips that have worked well for me during my days as a university student. If you’re a student freelancer now (or have been one in the past), what saving tips and tricks did you use to budget your freelance earnings? Were you successful at it? What challenges did you face while trying to budget your earnings?
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