How to Make a Budget while Freelancing as a Photographer
When you have a steady paycheck from a full-time job, it's easy to make a budget. You know how much money to expect each time you get paid and you can adjust your spending accordingly. As a freelancer, however, you are often not sure when you will have jobs and solid paychecks coming in or if you'll have a dry period. This makes budgeting tricky, but not impossible. Here are some tips for making a budget as a freelance photographer:
Keep track of what you spend
It's shocking how many people don't know what they spend their money on. It simply goes into their bank account and then disappears every week. To get a good basis on which to form your first freelance budget, you'll need to understand what you spend your money on. You can do this manually by keeping track of every receipt from each transaction you have for a month, or you can go the electronic route.
There are many helpful apps available that can make this task much easier. They connect directly to your bank account and create itemized lists and charts to help you understand what you bought each week. In a quick glance you can see how much you spent on dining out, utilities, clothes and shopping, as well as business expenses. Do this for a month or two to get an average of your spending habits. Be sure to take into account any special needs that you had that month that were unusual, such as emergency plane tickets or renewing your passport. Remove the cost of these items from what you spent that month in order to get a closer-to-average set of numbers.
Once you start tracking your spending, you may be surprised where your money goes.
Take different spending categories into account
Use the information you learned from tracking your spending habits to establish a budget. Categories to keep in mind include living expenses (groceries, rent, electricity, heat/gas, water) and extras (stuff you don't need but may want, such as clothes, coffee shop drinks, cocktail hours, movies, etc.). You'll also want a category that is dedicated to emergencies and savings. Even if these numbers are much lower than the other categories, putting some money away in case you need it will give you piece of mind and may help you at a later date.
Get some gear
As a freelancer, you won't have access to high-tech camera gear through your workplace. Instead of going to the cage and checking out a camera and light rig every time you have a shoot, you'll need to own your equipment.
"You don't need the newest gear when you're starting out."
When you are just starting out, you don't need to have the best-quality, newest cameras and other gear. Save up to buy equipment that is in good condition and will suit your particular needs. Maybe you do a lot of outside shoots or you need to be sure you have a portrait backdrop on hand. Buy only items that you know you'll need frequently so you're not spending money unnecessarily. You can even consider trying to earn an art grant from a gallery or community organization to help pay for your equipment.
Pay yourself like an employee
You are your own business when you become a freelancer. While you could take every penny of the commission you earn doing photography and consider it your personal budget, you should really keep your company in mind. This means potentially trying the 50/20/30 budgeting method mentioned in Forbes. Out of the money you make freelancing (and potentially the profit you earn if you sell art online):
- 50 percent should go toward living expenses,
- 20 percent should be used to pay yourself and
- 30 percent should cover fun spending like coffee, going to the gym and buying clothes.
When you first start out freelancing, you will likely not be able to stick to this ratio, as you won't be making top dollar and will need every paycheck to go towards your personal life that is understandable.
Once you have been in the business for a while and you have a steady stream of clients, you should be able to adjust your budget to allow for more saving and less spending. Plus, with experience comes the ability to increase your price. When this happens, be sure to change your budget accordingly. You don't want to just give all the extra money to your paycheck. Instead, consider investing in newer equipment or things that can grow your freelancing business like a customized website or marketing materials. You can always change your budget to fit your situation, so be sure to revise it whenever necessary.