Being a freelancer or an entrepreneur comes with envious perks like flexibility and independence. You’re not tethered to an organisation and don’t have to mould your life according to the demands and expectations of a superior. But the benefits can come with financial inconsistencies. Without a steady paycheck, financial planning, taxes, economic downturns can all seem daunting. Here’s how to take charge of your finances as a freelancer or business owner:

1. Establish a Financial Safety Net
One of the biggest challenges of freelancing is irregular income. To protect yourself during slow periods, build an emergency fund with a savings account covering at least three to six months of expenses. This cushion ensures you can manage essential costs even when the gigs play hard to get.

2. Budget Like a Boss
Traditional budgeting may fall short with fluctuations in income. If you’re really tight on cash, try a priority-based budget first:

• Cover fixed expenses (rent, utilities, insurance etc..) first.
•  Allocate funds for variable costs (marketing, software, suppliesetc...).
• Set aside money for savings and retirement.
• Keep a buffer for unexpected expenses.

3. Try to Avoid Mixing Business and Personal Finances
An overlap between business and personal finances can create unnecessary complications and also cause tax headaches. Open a separate business bank account and use dedicated accounting software to track income and expenses. This makes tax filing easier and helps you understand your true financial health.

4. Plan Ahead for Tax Season
Unlike 9-to-5ers, freelancers and entrepreneurs don’t have the luxury of automatic tax deductions from pay cheques. To avoid unexpected liabilites during tax filing season, estimate what you owe and set aside 25-30% of every payment in a separate account. Better yet, consider making quarterly tax payments to a separate tax account so tax season doesn’t hit like a financial gut punch.

5. Invest in Retirement
Without provident funds, gratuity, or pension plans, freelancers and business owners need to turbocharge their future. Once you get into a rhythm with your finances, you can start a retirement fund and put some earnings away every month or every quarter. You might find it premature, but it’s never too early to start planning.

6. Get Professional Help
Consulting a financial expert or accountant may seem like an added expense, but they can help you maximize deductions, optimize cash flow, and ensure long-term financial success.

With some astute planning, freelancers and entrepreneurs can relish the innumerable benefits of their freedom without scrambling to navigate their finances.

ALSO READ: Weathering Market Storms: Why Fixed Deposits are Your Financial Anchor

Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.