There are lots of money mistakes people make every day, but freelancers should be especially careful with their money decisions. Not only do you have to make sure you make the right decisions for your future, but you also have to make sure you make the right decisions for your business so that you will prevent a major halt in your freelance career. These are ten of the biggest mistakes you could make as a freelance designer, and you should definitely avoid making these mistakes if at all possible.

1. Failing to Make A Budget

Absolutely everyone, freelancer or not, should have a household budget. You need to know exactly where your money needs to go in order to know how much you have to spend on luxury items. This is the perfect place to start, especially if you are in debt. Making a budget can be difficult when you don’t know how much money you will make every month. The best thing you can do is make a guess as to how much the low end of your monthly income will be, and save the rest for bad months when you can’t seem to make ends meet.

2. Failing to Track Your Finances

In order to make a proper budget, you’ll need to keep track of your personal spending for each month. Add up all of your fixed expenses each month (mortgage payment, cell phone bill, etc.), guess how much you will need for your variable expenses (utilities, groceries, gas, etc.), and also make a point to set aside a specific amount for your savings. When you know how much you need, it is much easier to follow a set budget.

3. Failing to Make a Tax Plan

When you are self-employed, it is very important that you have all of your finances in order for tax season. It is your responsibility to send in your income tax to the IRS every quarter as well, and you will need to calculate exactly how much you owe them to take out of your income each month. It is very easy to make a mistake here, which could lead to an audit, so it is very important that you plan ahead for your taxes.

4. Failing to Set Aside Emergency Funds

Everyone should have an emergency fund with at least six months’ worth of expenses set aside unexpected emergency expenses. However, as a freelancer, you should probably have more set aside just in case there is a slow month with your work. This safety net should make you feel more stable in your finances and in your life.

5. Spending Beyond Your Means

loans to pay for that lifestyle because their income won’t pay for it. These habits are very bad financial decisions and they could put you into a lot of debt that will be very difficult to get out of later. If you really want something that you can’t afford now, save up for it instead. You will have a great satisfaction when you are able to pay for it in full.

6. Not Charging Enough

As a freelancer, you need to know how much you and your work are worth. You need to know that you deserve to earn a good income, and not just the income you can live with. You don’t want to get paid less than the value you are able to provide, so do plenty of research and charge a price that you deserve.

7. Failing to Adapt in New Situations

When a freelancer’s income is less than they expect and they don’t adapt to their new situation, they could find themselves in serious debt. When those tough months come along, you need to make sure you cut out unnecessary spending. This could mean you have to cancel your cable or stop eating out for a while, but in the end you won’t have to worry about financial trouble.

Another thing you should be adjusting as times change is your rate of pay. If you continue to keep your rates the same while the cost of living rises, you will soon find yourself struggling to survive on your income. On the other hand, you don’t want to jack your rates so often or make them so high that no one wants to hire you. Every year, look over your rates and expenses and make adjustments as necessary.

8. Failing to Save for Retirement

Do you really want to be working for the rest of your life? If so, then that’s great, but what if something happens to prevent you from working after age 65? The truth is you don’t know what your future holds, and you need to be prepared for every option. Even if you’re still in your early 20’s and you don’t think you need to be thinking about retirement, you need to think again. The sooner you start saving for retirement, the easier it will be to save the money you will need. Even if you can only contribute $25 or $50 each month right now, make a commitment and increase that amount every year. Make a plan so that you are prepared, no matter what happens.

9. Starting Work Without Payment

This common mistake could prove to be very costly. If you trust your client too much and start your work without a down payment, you never know if they will actually pay for your work. You also don’t want to waist the time spend on the unpaid work that you could be using to work on something that will bring in income.

10. Failing to Track Your Credit

Finally, it is very important that you check your credit report every year. Your credit report is very important for your financial future, so you’ll want to make the best decisions possible. Checking your report will show you exactly what you should and should not be doing to achieve a good credit score.