Personal Finance for Freelancers (Or How I Got an $8,700 Tax Return)

I was 23 years old when I became a full-time freelance copywriter.

At the time, I only had a basic understanding of credit scores, savings accounts, and personal taxes. I’m a bit embarrassed to admit that I had zero knowledge of things like business write-offs, investing, index funds—or business vs. personal taxes.

Entrepreneurship forces you to think differently about money. And for me, freelancing was a leap straight from the kiddie pool into the deep end.

It was sink or swim.

Before you swan dive after me: I’m not a money expert. This article is not financial advice. I wrote this blog to highlight my personal journey navigating the financial side of running a freelance business. This is how I think about my business and personal income, and how I’ve structured my financial life in a volatile business.

Personal finance is a massive subject that doesn’t receive enough air time in school. For all my teenage years and into my mid-twenties, I was afraid to learn about money because I feared the possibility that I was doing everything wrong. Ignorance is bliss, right?

Fortunately, today personal finance is one of my favorite subjects to read and learn about. I’ve managed to grow my freelance business to six figures, get a mortgage while self-employed, and every month I save and invest a high portion of my income. In other words, I didn’t drown in the deep end. And that movement from fear of finances to deep curiosity has changed my relationship with money—and is the primary reason I’m sharing my story.

So, put on your goggles. Let’s explore the depths of my financial life.

The wake-up call (and my personal finance journey)

I launched my freelance business in 2016. At the time, I went from earning minimum wage at a front desk job to earning the equivalent of minimum wage as a novice freelance writer. A friend (and experienced agency owner) told me early on that I should set aside money from every paycheck for taxes. I ignored their good advice, mostly because I didn’t have enough money to save. Every penny I earned went toward living expenses.

With my friend’s warning top of mind, I was terrified to file my taxes that year. I knew I’d owe something, but I didn’t have a savings account to meet the blow. After a few hours of working through TurboTax, I got lucky. It turns out that I’d overpaid some W-2 tax income at my previous 9-5 job in the first half of the year. When all was said and done, I owed the government less than $100 in taxes. Phew!

Sarabeth and I got engaged around that same time. I knew that my financial ignorance would now impact both of us. Sarabeth made it clear that she didn’t want to be the one managing our finances (and especially not our taxes). The burden to learn was on me.

I knew that I’d been lucky with the tax situation in 2016. I also knew that the next tax season wouldn’t be so easy. I had to make a change.

I bought my first personal finance book a few weeks later. I wish I remember