How Freelancers Can Prepare Financially for Slow Seasons
Practical financial steps to take before work slows down.
Happy Wednesday! You may have noticed that the newsletter didn’t hit your inbox last week. That was intentional. After a couple of slower months, it’s been a hectic few weeks on the work front.
I’m thankful that a good amount of work fell on my lap, but there was a lot to get done within a short timeframe. I’m sharing all that to explain that I’m now referring to this as a weekly-ish newsletter instead of a weekly newsletter. Because sometimes life happens.
Anyway, let’s get to it. Last time, I wrote about some ways freelancers can navigate slow seasons. One idea was to spend time on business tasks that have fallen to the bottom of your to-do list, like updating your portfolio, improving the client onboarding process, and building a financial plan for the quieter months.
This week’s newsletter is part two, the financial side of preparing for a slow season. If you’ve ever felt financial anxiety during a slow month, this week’s newsletter is for you. Here are some actionable steps you can take when work is steady to make the next slow stretch a lot less stressful. Let’s get into it.
Revisit your recurring expenses
Most of us probably don’t review our recurring expenses often enough. When work is busy and money is coming in steadily, recurring costs are easy to overlook. But when work slows down, every extra expense adds up fast.
It’s worth auditing your recurring expenses every six to twelve months. Go through both your personal and business spending and ask yourself:
Is this still necessary?
When did I last actually use this?
Is this still a good fit for my life and work?
A colleague recently told me she had been paying for a costly subscription for over a year without using it.
Recurring costs, like subscriptions, are easy to overlook — especially when life gets busy.
Cutting expenses that no longer serve you frees up money and keeps your monthly costs more manageable. Any savings you find could go a long way when work slows down.
Know your baseline number
Knowing your baseline number can make a big difference. It takes the guesswork out of financial decisions and can make slow months feel a lot more manageable before they even arrive.
Add up what you actually need to cover your essential monthly expenses — things like your mortgage or rent, utilities, insurance, and groceries. That total is your baseline number.
Your baseline number tells you a lot. It clarifies what you truly need to earn each month and makes it easier to set rates, evaluate projects, and make smarter financial decisions, no matter what’s happening with work.
Build a dedicated fund for slow seasons
I’ve talked about how I maintain a separate PTO fund. It’s a way to pay myself when I take time away from my business, including vacations.
Several readers reached out to say it resonated and inspired them to do the same. Guess what? You can do something similar for slow seasons.
Once you know your baseline number, you have a savings target to work toward. Here’s how to make it happen: Every month, set aside a small percentage of your earnings into a separate savings account.
Over time, the goal is to build your fund to a point where it can cover your essential monthly expenses for at least a month or two if work really slows down.
Just make sure it’s in a separate savings account. If your fund is mixed in with your regular everyday spending money, it’s too easy to dip into.
Stay on top of your invoicing
When work gets busy, it’s easy for invoicing to fall to the bottom of your to-do list. But staying on top of it is one of the best ways to maintain a stable cash flow.
Get into the habit of sending invoices promptly after completing work. If you have any outstanding invoices, follow up.
If keeping up with invoices is a struggle, invoicing software can make a difference. Once you set up automatic reminders and follow-ups, you’ll spend less time chasing payments.
For those dealing with frequent or recurring late payments, it may be time to re-evaluate your payment terms and update contracts with existing clients. Clients who repeatedly pay late aren’t worth the headache.
Before the next slow season arrives, it’s worth doing a quick audit of unpaid invoices. Getting paid for work you’ve already completed is one of the easiest ways to strengthen your finances before things get quiet.
Diversify your client base
Diversifying your clients, projects, and income streams is something I’ve talked about before, but it’s worth revisiting. When you rely on a limited pool of clients, work exclusively in one niche, take on only one type of project, or rely on a single income source, you leave yourself with very little cushion when things slow down.
I’ve been there before. When things slowed down with a couple of clients, I felt it immediately. It’s a hard lesson to learn.
While diversification can’t guarantee you’ll avoid a slow work period, it can significantly reduce the financial damage when one hits. The best time to diversify is before you need to, when work is steady, so consider this an invitation to review your recent clients, projects, and income streams to see whether you need to strategize and make some changes.
The best time to prepare is now
As freelancers, we have little control over budget changes, strategy shifts, or a client bringing work in-house. But we can control how we prepare. Taking steps to get your financial affairs in order before work slows down can make a significant difference when it does. Plus, regularly revisiting your finances is one of the best habits you can build as a freelancer, slow season or not.
As always, thanks for being here. I hope you have a great rest of the week.