If You Are a Freelancer, Make a Plan for the Hibernation Season
Freelancing is a great way to be flexible in a tough job market. It is also financially unpredictable. Give yourself a hibernation fund to get you through your tough months.
As the personal finance blog Rags to Reasonable points out, one of the biggest downsides to freelancing is that you can go weeks or months without big clients. This is not the end of your career, but it means you need to prepare. By planning ahead and earmarking yourself a hibernation fund, you can survive a metaphorical winter:
As a variable income earner who makes good money, your first priority is to save enough to get through these difficult times. Remember … hungry artists don’t think about art … they think about sandwiches.
This is difficult to do when you are bringing in a large lump sum. It’s tempting to view all of this as disposable income. However, being a freelancer is more like running a business than being an employee. This big check will help your company survive. Not be your personal paycheck.
Lessons From Bears Yes: Variable Income Masters | From Mud to Mind via Rockstar Finance