How Freelancers Can Stay Secure

The Gig      Economy

Freelancing or the gig economy is growing at a fast rate.  Whether it’s a result of the economic downturn or the desire for more independence, more people are choosing to freelance. 

The Problem With Payment

While freelancing can be rewarding in many ways, there is one issue - that of payment.  Based on your contract, you may be paid in advance - or in some cases, much, much later.

The Problem With Steady Income

The other issue with freelancing is that much like there’s no routine to your day, there may be no routine to how income comes in.  Some months pay well, others don’t. 

Freelance Financial Security

Since projects come and go, and times are uncertain, you need to make sure there’s enough in the kitty at all times to tide over a lean month.  Here’s how. 

Emergency Fund

You MUST create an emergency fund, with enough money in it to cover business and household expenses for a year.  Ideally, it should be accessible within 24 hours. 

Business & Personal Expenses

Make a clear distinction between your personal and business expenses. Pay yourself a salary.  This will provide a clearer picture of your financial plan. 

Business & Personal Accounts

To make it easier, open a separate business account for your salary, emergency fund, taxes and business expenditure.


Make sure you have health and life insurance for yourself.  This will help cover hospital expenses or in case of emergencies. The life cover should be 10 times that of your annual income.

Second Source 

A second stream of income provides stability. Invest in assets that give you a regular income, like  investments that earn interest or rental income.

Mutual Funds

Mutual funds allow you to invest in lump sum and through SIP. But SIP is not an option for people with irregular income.


Use the Systematic Transfer Plan (STP) where an investor invests a lump sum in one scheme and regularly transfers a predefined amount into another scheme (of the same fund house).

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.