Freelancing is tough. Are you ready for it?

One of the most important, overlooked aspects of owning your own design business is preparation for the inevitable rainy day.

What would you do if something happened and you needed to take some time off?

If you can’t pay your upcoming mortgage?

If you realize you aren’t able to survive solely as a freelance designer?

Today I’ve got three solid tips for ensuring you can survive those lean months, unplanned expenditures, or unexpected life events.

Save. Save. Save.

When business is good and the payments keep rolling in, it’s hard not to buy that latest gadget or splurge on a hobby.

Before you reward yourself for a job well done, though, set aside 10% of your income in savings.

Can’t afford that yet? Set aside 5%, or 2%, or $10.

How much should you set aside? If you’re purely self-employed, a good benchmark is a year’s expenses in liquid assets such as CDs or a bank account with the best interest rate you can find. I know, that’s a LOT of money to accumulate, but set goals and work your way up.

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Remember, life is a series of peaks and valleys, and when you hit that valley you’d better have something left over from the last peak. One day you’re going to be really thankful that you have money set aside for a new refrigerator, hard drive, or a week off of the grid with your hospitalized grandmother.

Create Multiple Sources of Income

As entrepreneurs, both our personal and professional lives are directly affected by a lack of business. Therefore, it behooves us to find several sources of income so that when one goes dormant we can still eat. Try some of the ideas below to diversify your income.

  • As Preston has promoted in several posts, generate passive income. Read this post for more tips on how to find successful methods of passive income.
  • Seek out a temporary or contract design job. It can be a lot of work, but it’s temporary.
  • Work a full-time job and freelance in your spare time. This is a great option for those who aren’t sure if freelancing is for them. It can be exhausting to work two jobs, but your freelance income is probably all profit – save some of it!
  • Work in a totally different field. Example: I officiate local sports. It pays decently and the world of sports operates independently from design, so the chances of both tanking at the same time are nearly nonexistent.
  • For more, read this post about Preston’s secret to making steady income as a freelance designer.

Make a Backup Plan.

In the event that things really go south, you need to know what you’re going to do besides begging your parents for money and a roof over your head (although this can be a last resort, I highly recommend exploring other options first).

A backup plan is unique for every situation.

Are you going to tide yourself over with any job you can find?

Will your spouse’s income tide you over for a month?

Two months?

What expenses can you cut?

Do you really need the most expensive cable TV package?

Can you survive on unemployment?*

You don’t have to have your plan all sorted out tomorrow, but start answering these questions to work toward a more secure future. Often times you’ll find you can immediately find savings!

*Note: In my experience, filing for unemployment in the US while making some (but not enough) money is really, really difficult due to the amount of forms and hoops you have to jump through on a weekly basis.

You might be thinking these tips seem like common sense, but you’d be surprised how many entrepreneurs (as well as the general population) forgo this type of preparedness.

Okay Millo readers, it’s your turn.

What does your backup plan include? Do you have multiple sources of income? How do you save rather than spend? Let us know by commenting on this post!

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About April Greer

April is the Director of Projects at Reliable PSD, a design-to-code company for designers, by designers. She’s the glue keeping everything together, organized, and right on time, and giving everyone a fantastic experience while she does it.



  1. Great article! I’ve been freelancing full time for six years. What works for me is to save 1/3 of every check I receive in a separate savings account. I do this automatically before I even have time to think about spending the whole check! I use that savings for my quarterly tax payments (ugh!) and my retirement fund … at the end of the quarter I still have extra cash for those unexpected emergencies or software updates, etc.

  2. Great post, April! This is the kind of article I love to read. Relatively short and full of great info! It’s funny- last week I just went in and setup my savings that pulls $25 every month from my checking, and I also take 10% from any income. Thanks again for this great post! 🙂

    • Brent,

      Thanks for your kind words – I hope to continue proving great content succinctly! (I will warn you, one of my upcoming posts is a bit longer – sorry!) But I’ll definitely keep your preference in mind while writing.

      Good for you setting up your savings! When you make it automatic, it’s so much easier. You won’t miss the extra cash…and when you really need it, it’ll be there.

  3. You have touched on the area on entrepreneurship that we so often ignore: planning for the what if. What if I don’t get a job for 2 months. What if I have a $600 car repair bill. What if my external HD dies. All of these things can bring a freelancer to their knees. I know, I have experienced all of them and many more.

    You must start saving with your first job. Make $50 on a job, put $5 in your reserve. That last thing you want to start doing is turning a $500 new computer into a $2500 computer because you had to put it on your credit card and paid only the minimum for 10 years. Yeah, I know about that as well.

    Luckily, with my last business riding the economic boom, I was able to create a 12 month reserve fund. I am so happy that I did because after the last 4+ years it is down to 6 months. I don’t know if I would have made it without it.

    I also strongly suggest developing some passive income sources if you can. I have been spending the past 6 months working on this and am close to the point of it paying all of my business expenses monthly. As a distributor of business printing, instead of constantly hunting for my next end user client, I have found a couple of print designers who use my service to print THEIR clients jobs. That has turned into a nice 6-8 easy jobs for me every month.

    It doesn’t matter how great a designer you are or how great a widget you sell, if you cannot survive the cash flow inconsistencies of freelancing, you are going to have a really hard time surviving.

    • Michael,

      You and me both! Late last year I took an entire month off for a death in the family. Then Christmas. Then new tires last month. Then annual vet checkups for my dogs. Car insurance next month. It’s always something! *sigh*

      Credit cards do that so easily, too – all of a sudden that great deal you had to have is the worst financial mistake you’ve made all year.

      Thanks for sharing about having to dip into your savings – as I have had all of these things come up in a matter of six months, I’ve had to dip into my savings and I’ve felt SO guilty about it. I have to remind myself that that’s what it’s there for, but it’s a bit scary and frustrating to feel like you’re going backwards. I am traditionally super-frugal, so thanks for sharing and making me feel like I’m not the only one!

  4. I’d recommend opening a business line of credit with a local bank. $5K-$10K will give you an extra cushion if there’s a lull in work.

    • Chuck,

      Definitely useful to have credit when you need it, but being proactive so that you don’t have to borrow (as much, in some cases) seems like a wiser solution rather than being reactionary. These days (in the US at least) interest rates on lines of credit have been rising (but not interest rates for our benefit). I try to avoid those fees if I can!

      Making sure your credit is in good shape goes a long way toward getting that extra cash when and if you need it.

      Thanks for sharing!

  5. This was very helpful and useful to read. Very important tips. I am from the UK and have been unemployed since 8 months now after doing mundane menial jobs that I just hated. I want to get into freelance designing but it has been a long stretch away from the game and with no money it is hard to make time for putting designs together while searching for a job that will pay the bills. I hardly have a portfolio since 2005 so its also difficult to get a client too. I’m hoping to find a job soon so that I can concentrate on freelancing in free time while working. Once I get there I will bear these useful points in mind. I just hope I get there soon before giving up. Thank you.

    • Naveen,

      Sorry to hear you’re in a rough situation. I’d recommend seeking out a non-profit that could benefit from your skills to beef up your portfolio or take some continuing education classes (a lot of them will state in the class description that you’ll get portfolio pieces out of them, or you can call the professor and ask).

      Keep your chin up, and good luck in finding a job that will lead to bigger and better things!

      • Thank you kindly for your response. I will keep at it. It is hard to concentrate on an art when the highest priority is finding an income. Chin is up though!

    • I am in the same boat as you, only I have been doing this for 7 years now. My problem is I took any kind of design work, I was the jack of all trade designer. That led me to have a very random portfolio with no real highlights of my actual strengths, and no real target audience because my clients were all random. I am starting from scratch after 7 years. It’s been hard for me to re vamp and try and get $ for bills at the same time..I guess when it comes down to it, if your not bringing in income do some Bono work. I am splitting my day in half now, one half is for portfolio re vamping, and the second half is to seek out new clients.

      • Thank you Ray. I guess it is best to keep trying and make sure to keep absorbing loads and loads of inspiring work you come across to fire up the new portfolio. What is Bono work may I ask? I like April’s suggestion about doing some work for a non-profit just for the sake of developing the folio. The half half split day idea is good I must say. Thanks again for the tips. I’ll start afresh from tomorrow.

  6. In my opinion free-lancing is at best if you do it whilst having a part time or full time job I did whilst working for the police and for that year alone not taking on to much work I got a great income. I believe organisations though its obviously hard but that’s a risk you take as a directing business man or woman.

    • Shane,

      Preston does it and he’s really enjoying it (since the last time he talked about it) – he wrote a post around the beginning of the year that was pretty popular if you’re interested.

      It’s pretty nice when your freelance is all profit!!!

  7. The only thing I’m sucking at is the ‘Save. Save. Save’ bit. Multiple revenue streams can come in the form of passive sales of templates, contests, etc. on sites like or I also try to keep my work pretty varied: WordPress sites, remote contracts with small companies, UX/wireframe work, visual design, some print, and I participate in studies (recently I was invited to visit Adobe to answer some questions, and they paid me $200). As for the backup plan, living in San Francisco helps haha — there is a massive demand for tech jobs here. There is no recession in San Francisco.

    • Benny,

      Varying your work is an excellent business move – I do the same thing with the intention that none of my repeat clients make up more than 20% of my business. I’ve got one really large client that is still over, but I’ve worked hard to find new repeat clients to balance out my business.

      The save bit is much easier with bank automation these days. If I had to physically make it to the bank to deposit money in a separate account it wouldn’t happen. Start a savings/money market account and automate a certain amount to be transferred from your checking to your savings every month.

      You won’t notice the extra money gone, and when you really need it; it’ll be there. Sometimes, life hits you hard and fast. If you read my comment to Michael a few posts up, you can see in the last six months I’ve had a ton of money pits! No bueno. Also at times life throws you a curveball where you’re not able to work, so having money to survive that time is a big plus.

  8. Easier said than done. While this is a great article, it has been said before. Unfortunately when I started out freelancing I kind of just fell into it, I didn’t really decide to say I’m going to start freelancing. I was working at a job for 10 hours a week and getting ready to move to a new city. I quit my job, and then the move to the new city fell through. I thought about going to see if I could get my job back, but I was suddenly making money through freelance jobs, more money than I was at my actual job. That’s how I started freelancing. The unfortunate part is I didn’t have any backup money or any savings and I was in fact behind. Since then I’m still playing catch up and I’m getting accounts in here and there but not nearly steady enough.

    It’s tough going full time, but I know that others have done it and eventually I’ll be successful in the financial sense. If I could go back I would make sure I have at least 3 months of living expenses saved away, and then decide what I need to make to live off of, and cut myself a check each money, versus just stuffing all the money in my account.

    I know all the tricks and tips on getting head financially, and getting successful. However you can’t put any of it into practice when you don’t have money rolling in and the money you do have has to go to bills that you are behind on.

    There is no secret. Just hard work and good sense = $uccess.

    • Laura,

      Oh, certainly – I’m not imparting ground-breaking new information here. Nonetheless, it seems like a large portion of our population forgets these simple truths and sort of ignores that there may be hard times ahead. Sometimes we revert back to our teenage selves with the motto “that can’t happen to me.”

      It’s very true that once you get behind, it’s very hard to catch back up. That’s a different post entirely, though. My intention with this one is to help the Millo community proactively secure their futures and help prevent them from getting behind in the first place.

      Good luck to you!

  9. Great article! Very helpful. I also do several different things. Raising antique roses and releasing white doves for memorials and funerals. Sometimes its very difficult balancing and arranging scheduling for all this, plus freelancing, but I’ve come to realize how important they are to my livelihood and how blessed I am to have other avenues of income for those “valleys”. I’m never sitting around waiting on a clients approval for a job. When I do have those “in between times” I’m working on one of my other “jobs”.

    • Darla,

      It’s really great your multiple avenues of income are in separate industries. I know the feeling of timing – sometimes I have games to umpire and deadlines that all happen to fall on the same dates, and other times things work out more smoothly.

      Thanks for sharing!

  10. Been freelancing fulltime for 8 months now, been starving for 6 months lol
    but paid my mortgage so I think I’m doing well 😛

    Its hard to know where your next check is coming from, but sure is an adventure not for the squeamish. A good strategy is to stick like a leech to a big company that needs a lot of print work and find a very cheap print shop 😀

    • Nod,

      Definitely, if you find one good repeat client, that’s a great way to start. However, work toward diversity so that that great client doesn’t bankrupt you when their marketing strategy/manager/budget changes.

      Good luck in securing a more lucrative future!

  11. Disability insurance. I would never go without it. I bought it when I was young so it’s $128 a month for me until I’m 65. I got really sick in my 40’s–surgery, chemo, radiation, got laid off from my steady freelance gig–it gave me $3500. a month, tax-free. Before I needed it, at times when I was full-time employed I thought about ditching it, but my insurance agent talked me out of it. I’m so glad he did.

    • Kriserts,

      Awesome advice – I’m looking into insurance (and an accompanying post) right now. You just never know…

      What company do you go through? Love to hear more about it as I’m probably still considered young (29).



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