The Simple Math You Need to Manage Unpredictable Income

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Freelance writing was just a side gig I didn’t take seriously until I started earning five figures a month.

From writing for peanuts to becoming a hired business writer, I scaled my small gig to attract stable clients.

In what appeared to be a dramatic twist in my freelance career, I found myself working with businesses, individuals, and entrepreneurs, taking on more work to write campaigns for those with substantial marketing budgets, allowing me to thrive financially while delivering the premium work they expected.

You would think it was a modern Cinderella story made for movies and books. Poor Girl Goes to Hollywood and Buys the Building or something.

But it was far from being romantic.

As it turned out, when financial success unexpectedly happened, I was unprepared and clueless about managing my unpredictable earnings.

Of course, I spent mindlessly.

As my bank account flourished, I started buying random things for myself and others, to celebrate my success, to pat myself on the back for my hard work, to indulge in YOLO, to heal the inner child in me, and to finally have a taste of living the life those highly-paid, privileged writers at the cool kids’ table were enjoying that I only read about.

Until one day, five figures became four figures.

After thriving from a surge of well-paying projects, I started losing my clients one by one due to budget cuts, AI realignment, and the usual “fat trimming” or downsizing in businesses.

Unlucky for me, my bills and other expenses remained the same, and I had to pay them on time.

Lucky for me, I wasn’t left swimming through a drastic paycheck-to-paycheck situation.

Not yet.

I realized my financial turnaround was a teaser, a sneak peek at my bleak future if I kept managing my money the way I did.

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That’s when I told myself I had to do something to avoid my impending financial disaster.

And fast.

Enter the Old Numbers Freak

I used to work as a Media Planner for an ad agency, where I managed millions of “media money” for clients to allocate throughout their calendars for marketing campaigns. While I didn’t crunch numbers like the stockbrokers on Wall Street, I worked the math to squeeze out as much value as humanly possible from what my clients’ money could buy in a given campaign.

I told myself that if I could do it for my clients, I could do it for myself.

My Nerdy Process

The first thing I did was open a blank page on my laptop and jotted down what I needed to know to face reality, understand my financial situation, and start projecting and preparing for what’s to come.

I figured I needed real data on how much was coming into my bank account and how much was going out, based on my planned and scheduled expenses, every day, week, and month.

After I’d figured that out, I opened a blank spreadsheet and started incorporating what I’d learned from Media Planning to show my spending, savings (if any), and how much I could spend without guilt.

I tested my formulas over and over until the amounts in different tabs matched automatically upon data entry and were reflected in the graphs connected to the data in the designated cells of my grid.

Once satisfied, I made my digital tool aesthetically pleasing to my tired eyes. I chose pastel colors because they gave me peace of mind. I figured calmness, a dash of hope, and inspiration would help me deal with something as bleak and scary as looking at my dwindling future.

The final test was ensuring my bank account exactly matched what’s on my spreadsheet. After several tries and workarounds, the numbers matched. That’s when I knew the tool I needed to help me get started was ready.

I’m not an app developer nor a techie, but I understand formulas and automation. What I created was very simple. It was a basic tool, not complex like the hundreds of apps available online, but it was customized to address my specific goal and needs.

Knowledge is Power, but Discipline is Key

Since creating my simple financial tracker, I’ve been dedicating five minutes a day before bed to checking and updating my spreadsheet.

The daily exercise gave me the confidence to tackle the next day and has gifted me with the peace of mind I didn’t have when I constantly worried myself into troubled sleep about what I had gotten myself into and how to get out of it.

So far, the outcome has been life-changing.

Now, I can spend without guilt or anxiety because I know when I can and cannot, and how much I need to keep for savings and emergency funds. I no longer worry that I would plunge into a dark hole like some of the most successful social media influencers of our time, who have suddenly gone broke from earning astronomical salaries every month.

The Simple Math You Can Use to Fix or Improve Your Financial Planning

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If you want to manage your earnings as a freelancer, you can copy my strategy.

Create your financial tracker using the platform or tool you’re most comfortable with. Just remember. How you create your planner is your choice, but don’t forget to track these four crucial pieces of information daily, monthly, and annually:

• Incoming (Money received in your bank account, including your earnings)
• Outgoing (Money that leaves your bank account, including expenses and bills)
• Allowance (Money that stays in your bank account that you can spend freely after you’ve allocated/budgeted your outgoing money accordingly)
• Savings (Money that you keep in your bank account that you will not spend, outside of your allowance)

Once you’ve tracked these numbers and implemented this simple mathematical formula, you’ll have a clearer picture of your financial situation and a better budgeting plan.

Over time, you may be able to build your savings, which you can invest in the future to scale your assets, strengthen your financial security, and achieve financial freedom.

You Got This

For freelancers and others with unpredictable income, taking charge of your finances is essential, given the volatility of our industry.

If you want to outsmart the system, elevate your financial status, and take care of your future, the best time to be your “personal accountant and finance strategist” in the simplest manner possible is today.

If you don’t have time to create your own app or spreadsheet, you can use my financial tracker to manage your finances.

For more insights on freelance life, solopreneurship, and writing, follow me on Medium.