The Freelancer’s Guide to Financial Planning and Living the Life You Want

Josh Hoffman
Epic Freelancing
Published in
3 min readNov 9, 2015

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After launching my freelance business, it took me nine months to make a “full-time”* income that could support my lifestyle and work-life balance of choice.

(It’s worth noting that I don’t have the cheapest of lifestyles, so the number nine isn’t necessarily indicative of what it will take you to make a “full-time”** income that supports your lifestyle and work-life balance of choice.)

* I put full-time in quotes because, in the freelancing world, you control how often and how much you work, so long as you’re meeting your total monthly expenses.

Understanding your total monthly expenses

The key to making a “full-time” income as a freelancer is understanding your total monthly expenses (TME).

In order to do so, tally up all of your necessary and discretionary expenses, including how much money you want to save each month. Remember, this isn’t just about how much money you need to pay the bills, because freelancing isn’t a job; it’s a lifestyle choice.

Roll up your sleeves and put every big and little expense in there. Insurance. Car payment. Uber rides. Manicures and pedicures. 2 am Taco Bell runs. You name it.

Freelancing enables you to build your work around your life, as opposed to building your life around your work.

For instance, I like to travel four months out of the year because, as I explained in this post, it exposes me to new experiences and stimulates my brain, which enables me to come up with some of my best ideas.

Let’s say I spend an average of $3,000 per trip, or $12,000 per year. Instead of looking at traveling as a trip-to-trip or annual expense, I take the yearly total and break it down month-to-month to understand my total monthly expenses. $12,000 divided by 12 months = $1,000 a month.

(There’s also a psychological effect here, because $1,000 is much easier to think about than $12,000.)

Using your TME to calculate an hourly rate

Once you know your TME, take that amount and divide it by the total number of hours that you want to work each month. (160 hours is roughly the amount of hours for full-time work in a month.) This number will give you the amount of money that you need to charge per hour for “full-time” freelancing.

For instance, if my TME is $8,000 and I want to work 160 hours each month, my rate needs to be about $50 an hour.

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Now that you know your hourly rate, the next step is figuring out how many clients it will take to fill the number of hours that you want to work each month. Different clients require different numbers of hours, so we’re looking for the average here. For me, that average is about 35 hours per client per month, so if I take 35 hours and divide it into 160, that figures to be about five clients each month.

Therefore, I need an average of five clients to pay me $50 an hour each month in order to afford my desired lifestyle and work-life balance.

Epic Freelancing is the go-to resource for freelancers who want to achieve financial success, creative freedom and lifestyle design.

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Founder of IZZY – Stream Israel, basketball lover, mental health advocate