Money that does not arrive evenly.
WHAT THE PATTERN IS
Concentrated income in some months and little in others.
WHY IT IS DIFFICULT
Costs are regular and income is not.
WHAT TO ESTABLISH
Your monthly requirement: personal and business costs.
WHAT TO BUILD
A buffer covering several months of that requirement.
WHY
It converts a lean month from a crisis into an inconvenience.
HOW TO BUILD IT
Treat it as a fixed cost, paid from every payment received.
WHAT TO DO WITH LARGE PAYMENTS
Divide them: tax, buffer, costs, and what you may actually spend.
WHY
Large payments feel like surplus and they are not.
WHAT TO SET ASIDE FOR TAX
A proportion of every payment, immediately.
WHY IMMEDIATELY
Tax on income received months earlier is the commonest freelance financial failure.
WHERE TO PUT IT
A separate account you do not use.
WHAT TO ESTABLISH
What proportion applies to you.
WHAT TO PAY YOURSELF
A regular amount, rather than whatever arrived.
WHY
It smooths consumption and it reveals whether the business is actually viable.
WHAT TO TRACK
Income by month
The pipeline: work agreed but not yet done
Invoices outstanding
WHY THE PIPELINE
It is the warning of a gap, weeks before it arrives.
WHAT TO DO WHEN THE PIPELINE THINS
Increase effort on finding work immediately.
WHY IMMEDIATELY
The lead time from enquiry to payment is long.
WHAT TO AVOID
Accepting poor work in panic.
