How Freelancers Can Structure Their Bank Accounts For Financial Success

Financial success is undeniably harder to come by when you’re freelance. Yet, considering the number of seemingly successful freelancers out there, you may well consider that a risk worth taking. 

But did you know that just because freelancers aren’t talking about their financial strain, doesn’t mean they’re entirely happy with their incomes. Around 34% of freelancers report feeling dissatisfied with the amount of money they make, while roughly 70% lack pension plans or retirement savings. Many even find themselves in debt as a result of missed payments and more.

It’s not surprising that no one’s talking about this. According to experts like National Debt Relief’s CEO Alex Kleyner, silence surrounding debt or financial struggle is sadly commonplace. For you as a freelancer, it could also stop you from taking proper financial precautions. That could end your freelancing dreams before they’ve begun, but there is a better option, and it begins with these simple suggestions for structuring your bank accounts with financial success in mind. 

1 – Create a Financial Hub

Freelance life can really muddy the financial waters. You’ll have a lot of money going in and out, and if you aren’t careful, you could quickly lose track and end up overspending without even knowing it. This can lead to a financial tangle that you’ll struggle to straighten out. 

Hence, your first bank account structuring tip is to create what we’re referring to as a ‘financial hub’ account. Like a central train station, this is where all of your money will land before you take the time to siphon it off to different accounts. 

2 – Actively Pay Yourself

Many freelancers forgo actually paying themselves, and instead dip into a big savings pot (or hub) for personal expenses. But this is bad news for two reasons. For one, it leaves you at risk of spending more than you can spare. Equally, it could see you piling all of your finances into your business, meaning that you might need to seek credit or payday loans  for actual survival. 

That’s bad news, and it’s something you can overcome by simply paying yourself like you would any other employee. Set a regular date (monthly or fortnightly) and a salary amount, and make sure it lands in your personal account at that time so that you can meet rent, cover your bills, and actually live your life.  

3 – Treat Taxes as a Standard Expense

Freelancers often leave taxation until the last minute, but if you’re not setting aside any cash for this purpose, then you’ll inevitably face financial trouble. It’s a far better idea to treat taxes as a non-negotiable expense. 

In other words, you should transfer between 20%-30% of each month’s income straight into savings, and keep a tally of how much money you have there. Then, you’ll never find yourself caught short or at risk of making questionable financial decisions that you’ll struggle to come back from. 

Freelancers don’t need to fall into debt, and these basic bank account structures could be just the thing to stop that eventually.