Hey freelancers: have you been keeping track of your monthly expenses like I recommended 18 months ago?
Well, because at heart I am The Illustrator Who Wanted To Be An Accountant™, and because my site stats claim this was a mighty popular post, here’s an update to our Monthly Revenue & Expense Worksheet as a PDF for you to download. (Also, here’s an Apple Numbers spreadsheet. If anyone can convert this to a prittay Excel version, that would be coooool!)
Here’s how we use it:
- Print out a new sheet every month.
- Use a sexy magnet (optional) to stick it on our fridge (or front door; somewhere where you’ll see it often each day).
- Jot down every miserable Expense you make during that month. (Round up and drop the cents to keep it simple.)
- There’s also a teeny tiny box for Revenue, so jot down every job you get. (Or jot down every cheques you actually receive; whichever works best for you.)
- Jot down business expenses too, like HST/GST, software, hardware, paper for your printer, etc…
- Add these up at the end of each month* and see what kind of hot mess your finances are in. FUN! (And if you’re like me, you’re going to want to double-check your calculations; our groceries were $960, not $850. FOR TWO PEOPLE. WTF?)
This is a rough worksheet rather than a typed-in-the-computer spreadsheet for tax purposes. It’s meant to encourage you to quickly jot things down so you can get a bird’s eye view of your “money in/money out” situation. It lets you see right away if you are in the red or in the black, and if you have any money left at the end of the year to put away and invest.
- Where are you over-spending? Restaurants? Clothes?
- Are you not bringing in enough money?
- Did you bring in more than usual last month? Good job!
- Do you have some left over each month you could be putting into tax-free savings account, or a retirement fund? (Are you even doing this?)
Yes, you can use an app (there are literally hundreds out there, and you may be able more easily to track them as they happen), but for me good ol’ paper-and-pencil works best.
When you’re done, you can type all the totals into a proper spreadsheet and have a
* I round up a little each time, because I know there are small items I forget here and there.
Freelancers, young and old: How do you keep track of your expenses? Paper or App? How accurate/disciplined are you about it? You run a business after all, so if you’re not doing this somehow or other, you’re only cheating yourself in the long run. Hop to it! :)