5 Common Financial Mistakes New Freelance Designers Make (And How to Avoid Them)

Making the shift to freelance design can be both exciting and challenging. Many new freelancers overlook critical financial practices, which can lead to unnecessary stress and even financial strain. Avoiding these common mistakes will set you up for success, allowing you to focus on growing your design business.

1. Not Setting Aside Money for Taxes

Taxes are an area that can catch new freelancers off guard, especially when payments don’t have deductions. Make it a habit to set aside a percentage of every payment for taxes.

Solution: Our Budget Sheet includes a tax allocation feature to help you reserve part of your income each month so tax time is stress-free.

2. Underpricing Projects

Many new freelancers start with lower rates, hoping to attract clients. However, undervaluing your work can lead to burnout and financial struggle.

Solution: Use our Pricing Calculator to set rates that account for all expenses, taxes, and desired profit, so you can ensure your projects are both fair and profitable.

3. Inconsistent Income Tracking

Tracking income and expenses may seem tedious, but it’s crucial for maintaining a clear picture of your finances. Without it, you risk losing sight of cash flow and profitability.

Solution: Our Profit and Loss Tracker is designed for busy freelancers, allowing you to quickly record income and expenses, so you can stay on top of your finances.

4. Failing to Create a Budget

Freelancing can come with income fluctuations, which makes budgeting even more important. A realistic budget can help you manage these ups and downs by planning for essentials and setting aside money for slower months.

Solution: Our Budget Sheet is easy to customize to your specific expenses, so you can create a plan that works for your lifestyle and business needs.

5. Overlooking Cash Flow Management

A lack of cash flow management can lead to late payments and cash shortages. Freelancers need to keep an eye on incoming payments to ensure that bills and personal expenses are covered.

Solution: Our Dashboard with Stats and Charts makes it easy to monitor your cash flow, track client payments, and understand your financial trends, giving you confidence in your cash flow management.

Conclusion

Avoiding these common financial mistakes can help you start your freelance career on the right foot. With tools designed specifically for freelance designers, you can tackle these challenges and take control of your business finances. Explore our suite of financial spreadsheets to help you manage your freelance design business with ease and confidence.