My least favorite part about freelancing is having to budget for taxes. I’m not a money person, but working from home has made it a requirement, and I was very resistant to it at first. Now, I’m better at tracking my finances even if it’s an uneasy truce. I keep track of my finances using a simple Google Sheets spreadsheet, but I know there are a ton of budgeting apps out there that can help keep track of the money you’re making as a freelancer. Here’s what I do:
Google Sheets
I get paid in large installments on UpWork rather than receiving money whenever I finish a contract. That makes tracking fairly simple because I have less transactions to track. That being said, I also have other sources of income as an editor. To keep track of everything for taxes, I start with a list on the left that includes:
- The date I received money
- The source of that money (company/platform/etc.)
- The method of payment (check vs direct deposit for example)
- The amount I received
Then, to the right of that list, I have another grid that totals everything. Since I have multiple sources of income, I use formulas to keep a running total of how much I’ve made from each source. The formulas look like this:
- =SUMIF(B2:B102,”UpWork”,D2:D102)
Broken down, this means that in the B column (my money source column), if it says “UpWork”, then whatever value in the D column (the amount I received in that transaction) is added to the total.
My last section is much easier, which is where I estimate the amount of taxes I will owe according to the money I’ve made. That formula looks like this:
- =F6 * 0.2
Broken down, this is the total field that I calculated above, multiplied by 0.2 which will estimate 20% of that number. It’s only an estimate, and you can adjust that percentage however you see fit for budgeting purposes, but it’s arguably the most important part of the sheet for me.
Google Sheets and Excel make it easy to gather the column information by simply selecting the column you want to pull information from. In Google Sheets, I was able to search for the SUMIF formula, and then a help bubble told me what each value needed to be in order for the formula to work. Just be careful if you decide to use formulas like this one, they are case sensitive when they reference the information in quotation marks. If I marked a source as being from “upwork” then this formula wouldn’t add to the total.
Spreadsheet applications are incredibly powerful, but they can be daunting at times. What do you think? Do you use a spreadsheet and keep track of your finances by hand? Or do you use budgeting apps? Or do you use something else entirely? Let me know in the comments!
-Katy
Author Rescue 