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Two tips at the beginning:

  1. Use cash only - I will be feeling how fast you will spending your money
  2. Start recording every single cost.
 

Do keep a spreadsheet/tool for incoming/outgoings. Personally, I only had around four clients a month, so I used an index card. List your current or near future clients & their projects and their balances. Check it each day. Getting into this habit as a freelancer is great as it gives you the approximate scope of your business off hand, helps you know when you need to find work or chase payment. Reminds you if clients have gone quiet too!

  • Learn to include MOS (Margin of Safety) in everything you do. Quote for work with a 30% margin minimum. Start worrying about running out of cash way before you do run out.
  • Learn that as a freelancer you are also an investor and business owner. Your time ultimately produces something which is has a worldly value. Make sure that you're aware of that value and are constantly working on improving it. In the end, it's easier to make more than to save more, and to some extent managing money becomes less central once you have a steady flow inbound.
  • Use bank/credit card services wisely. Obviously, I don't suggest anyone take any service without fully understanding the implications of doing so - but personally, I've found that putting all business expense through one account and personal through another I've been able to monitor my spending a whole lot easier.
 
Automation:
  • mint is probably the best app for this.  mint.com It tracks your spending, and is very easy to use. It is free, and makes graphs for each month, showing how much you spend on what.

    You can also manually add stuff to mint, which makes it good for tracking cash purchases.

    It pulls any info about spending automatically and does this for any accounts you have, including credit cards. 

  • 1) sign up for Mint (Personal Finance, Budgeting, Money Management, Financial Management, Money Manager, Budget Planner, Free Budget Software, Online Banking) and connect all your bank accounts and credit cards to it. 

  • 2) Use a credit card (not cash as other recommend) and checks as much as possible as it will allow Mint to track what you're actually spending money on.

    3) Log into Mint once a week and add detailed notes on the categories your spending on - go line by line; it'll take about 20 minutes the first few times.  Look at the graphs and get a feel for where your money's going and what it costs you to live.

    4) After about 3mos you should have a good handle on your burn rate (how much you're spending a month).  You'll see that you had startup expenses (first month or two where you were buying things to set up college room, buy books, etc.) but then after that you've settled into a pretty regular pattern.

    Overall, be cognizant of your spending - know what you're spending on, and why you're doing so.  It'll become a habit for you in time.

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