Freelance Finance

The Money Book gets a mention in a Policygenius Article on Freelancers

Image by  Thought Catalog  via  Unsplash .

I was interviewed recently for a short piece up at Policygenius. The topic is money and freelancing, a topic Denise and I explored exhaustively in our book, The Money Book for Freelancers.

The Money Book for Freelancers | Kiernan D'Agnese

Check out the article here, if only to see how I can manage to work the word “freaking” into a serious personal finance piece.

The article was written by reporter Hanna Horvath, who I was delighted to discover had once been a features editor at the same newspaper I worked at in college, The Daily Orange.

Thanks, Hanna. Nice meeting you.

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your free ebook, go here. Thanks!

Yes, You Really Do Have to Pay Estimated Taxes

For tax season, I’m running some of my older posts pertaining to our book, The Money Book for Freelancers.*


If there’s one lesson we learned as we interviewed experts for our book, it’s this: “Pay your estimated taxes.” This is the single biggest mistake freelancers make. They don’t pay their estimated taxes, and come April 15th, they’re shocked by how much money they have to come up with. No one likes paying taxes, but if you pay a little now, and a little throughout the year, you’re in better shape to deal with the final number come April.

Estimated taxes in the USA are due four times a year, in April, June, September and January. The dates may seem a little arbitrary. After all, shouldn’t quarterly taxes be paid every three months?

Short answer: No. The IRS makes the rules, so they can basically run roughshod over the Gregorian Calendar. On June 15th, you owe Uncle Sam some portion of the income you earned between April 1 and May 31. You get a two-month period at that point but get a four-month period at the end of the year. Quarter 4 estimated taxes are due January 15th, based on income earned September 1 to December 31. The official IRS websites on these matters is here and here. If you think it will help you, go ahead and mark these periods and the due dates on your calendar.

Skipping estimated taxes until the end of the year is not really an option. That only sets you up for penalties and interest. How much do you need to pay? The only person who can tell you that is your tax preparer. Chances are, when you get your annual taxes done, your tax guru printed up some vouchers for you to use come estimated-tax time. If so, then you’re golden. Dig out those vouchers and send in what’s printed on the forms. One goes to the feds, the other to the state in which you reside.

If you didn’t have your taxes done by a tax preparer back in April, then oy, oy, oy. You are making us nuts. After we went and told you in our book how important it was to have someone like that!

Some tips for finding that person.

 Our Tax Preparer Wish List 

  1. Someone who, duh, knows taxes. You don’t necessarily need an accountant (although depending on your business, you may) and accountants can be more expensive. What you do need is someone who specializes in taxes, and who works with a number of self-employed clients. Be sure to ask.

  2. Someone who charges a reasonable, yearly fee, depending on the complexity of your return. If you work alone, are struggling to make a profit and have a pretty manageable return, you shouldn’t be paying the same rate as someone who has 10 employees and a net profit of $250K. 

  3. You absolutely, positively want someone you can contact throughout the year to ask about quarterly tax payments and retirement investments. This is key. At the end of each quarter, you should be able to send an email to your tax preparer, telling her how much money you’ve earned in that quarter, and asking her to calculate your estimated taxes. You should also ask her to send you the vouchers you’ll need to mail in your various payments. It’s her job to do this for you. If she is unwilling to do this, wants too much money to perform this task, or is too distracted with other things to get back to you, get another accountant. You deserve someone who takes your business seriously.

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your free ebook, go here. Thanks — Joseph D’Agnese

Why are you tossing your receipts?

During the USA’s long slog toward April 15th, tax day, I’m running some of my older posts pertaining to our book, The Money Book for Freelancers.*


Every time I use an ATM machine, I’m amazed to see how many discarded receipts litter the ground under the machine or overflow the nearby wastepaper basket. I’m equally astonished whenever I hear customers decline a sales clerk’s offer to print out receipt. I don’t understand why anyone would toss out such useful pieces of information.

Freelancers are trained by nature—and hopefully by our book—to hang onto every receipt that passes through their hands. There’s a now-classic literary character, J. Sutter, a freelancer and former journalist, in Colson Whitehead’s novel John Henry Days, who lives for receipts. One scene in the book, if I’m not mistaken, has him chasing someone else’s fluttering receipt in an airport concourse so he can pad out his expense account.


I’m not Sutter, but I do hang on to every freaking receipt that comes my way. Back in the day, I used Quicken software to reconcile transactions from my bank with the receipts I’d collected during the week. Throughout the year, I’d keep all my tax-relevant receipts and file them away for safe-keeping after I did my taxes. These days, we use Banktivity software, but we still do roughly the same thing. Rather than save the paper receipts, we scan them daily or weekly, file the the digital scans in an Evernote folder, and toss the paper. It’s a handy system that I’m not likely to give up anytime soon.

Receipts, even those boring little ATM ones, are a snapshot of a specific moment in time. On Monday, August 21 at 13:53 o’clock you were standing at 123 Oak Street withdrawing $40 from an ATM, getting dinged $3.50 in the process. Or two days later, August 23, you got $40 cash back when you bought groceries at the market down the road.

One day, two weeks or a month later, when you’re trying to reconcile your various accounts using whatever financial software you use, are you really going to remember those seemingly inconsequential events? Probably not. But you’ll stare at the transaction you just downloaded from your bank and say to yourself, “What the hell did I spend $43.50 on? And where the hell is 123 Oak Street?”

If you had treasured that worthless scrap of paper instead of casting it to the four winds, you’d have the answer right in front of you. Instead, you’re beating your head against a wall, wondering why you can’t get a handle on your money.

If you can commit to using some form of financial software, and train yourself to hang onto these receipts, you’ll always have access to the little financial moments that flit through your life.

Get it in your head: You’re a freelancer. This is what you do. You save receipts. Period. This is what I’d like you do, just to get comfortable with this concept. This week, request a receipt for every single transaction you make through your daily life. Don’t just ask for it. SAVE it. If you share income with your partner, ask them to do the same. It’s not really a big deal.

At the end of the day, dump out all the receipts fro your wallet or purse and place them in a dedicated location in your home. Use anything from a paperclip to an inbox to keep the paper tidy.

Later, when you have a chance, use those receipts to catch up on your finances with some kind of financial software, whether it’s a Quicken on your computer,, or what have you. It’s a tiny little habit to get yourself into, but most people will not take the trouble do it, unless someone tells them to.

Guess what: I just told you.

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your free ebook, go here. Thanks — Joseph D’Agnese


Five Money Mistakes Freelancers Make


For tax season, I’m running some of my older posts pertaining to our book, The Money Book for Freelancers.*

This was supposed to be the year you got your financial house in order. Get more organized. Earn more. Spend less. And reach unparalleled heights in your career.

If only you knew where to start.

We’d like to suggest that if you do anything, nip these five bad habits in the bud now, so you never have to worry about them again. We consider them to be the five primo mistakes all self-employed people make. If you correct them before they become long-term engrained problems, you’ll be in good shape to move forward with most of your financial goals.

Heck, you might even be able to skip the financial resolutions next year, and go right to the fun ones, like, “I resolve to vacation more, and never worry about money again.”


Mistake #1: Not Having an Emergency Fund

Everyone should have a stash of cash set aside in case of unexpected financial disasters and interrupted income. In fact, we’d argue that freelancers need this fund even more than traditionally employed people do, because their income is a lot more erratic. Even if you’re a crackerjack freelancer, with tons of work coming in and invoices constantly flying out the door, there are still going to be dry spells. When that happens, it would be nice to have some money set aside to dip into.

But alas, few freelancers make a habit of socking away money regularly in such an account. Don’t let that be you. It doesn’t have to be a great deal of money. Five percent from every check that comes in the door is a good amount to save, and you’ll hardly ever notice it’s missing. Just make sure the money is deposited into a bank account that is not linked to an ATM card, so you can’t raid it on a lark. And see to it that the money is kept “liquid”—not linked to important investments or burdened with any withdrawal restrictions. A checking account at an online bank is the perfect place for the cash. Just an arm’s distance away, but close enough to tap into if need it. How much should you save? Start with one month’s living expenses, and then see if you can push it to three or six.

Mistake #2: Not Saving for Taxes

One of the blessings—and curses—of being self-employed is not having an employer who withholds your taxes from every paycheck you receive. When you bill a client, you bill for the whole enchilada. And when you get paid, you get the whole enchilada too. The trouble is, when tax time comes around, that tasty treat has long been gobbled up. Make sure you’ve left enough of that enchilada to give the tax man the taste he needs.

The worst time to start thinking about your taxes is weeks or even days before you have to pay them. Ideally, you want to be socking away money throughout the year, a little out of every single check that comes in the door. That way, you can slowly save up a tax nest egg. Not sure how much to take out? Not a problem. Look at your tax documents from the last two or three years, and calculate about how much you have been paying the tax man, expressed as a percentage of your total income. Start saving that percentage out of every paycheck. This number varies wildly from freelancer to freelancer, so mind your own business—not someone else’s.


Mistake #3: Not Paying Estimated Taxes

What good is saving that tax money if you don’t use it to pay The Man? In our research we discovered that accountants meet plenty of well-intentioned yet sad freelancers who do not pay their estimated taxes during the year, and who then feel doubly screwed when they have to settle up at year’s end. We’ve never understood this mentality: Would you rather pay $1,250 four times a year, or be forced to come up with $5,000 (and penalties and interest) in one lump sum once a year?

It’s a no-brainer: Paying in small, manageable chunks really makes a difference. It’s easier on your pocket, and you are less likely to blow that tax money on a spur-of-the-moment vacation to the Bahamas if you pay your taxes on a quarterly basis. If you develop the good habit of saving for your taxes, then you should develop the equally good habit of disbursing those funds in a timely fashion throughout the year. A good accountant or tax preparer should be able to help you with this.


Mistake #4: Not Treating Yourself Like a Business

Even if you are a company of one, you are a business. That means organizing your finances as any responsible business would. If you are not already, begin tracking income and expenses down to the penny. Receipts are your friend—never let them slip away. Financial software programs—such as Quicken or—can take some of the pain out of this chore and help make tax time a cinch. If you need to send and track invoices, manage clients, and do time-tracking, use something like FreshBooks or QuickBooks. 

And that’s just for starters. You must cultivate an interest in all things business. You must have business cards. You must have a website. You must develop a system for receiving and returning phone calls in a timely fashion. You must have a logo and stationery. You must have a retirement account. You must develop a process that keeps you connected to the rest of the business world, and you must execute it flawlessly in all your dealings with others.

Amazingly, this is hard for a lot of people to do. “I’m a website designer,” they say. Or, “I write software. I don’t want to be bothered learning about business. I don’t want to learn about investments or credit card accounts or invoicing. It’s boring.” Okay, fine. Just understand that if you don’t want to deal with these little details, if you can’t get psyched about this geeky stuff, you must hire someone to help take care of it for you. And don’t let us catch you bitching about it, either. If you don’t want to do it, you must be willing to pay for it. Your business won’t take care of itself.


Mistake #5: Living for the Big Score

A financial planner we interviewed told us that all self-employed people, including himself, are dreamers. They throw themselves into their work, trying to achieve their great vision, and forget about socking away small amounts of money for themselves along the way. Some people, if they do get money, stick it back in the business. “Once I land this big project, sell this book, launch this product, or share my great invention with the world,” they tell themselves, “THEN I’ll have so much money that I’ll be able to finally save for retirement.”

Folks, this is crazy talk. This is how cat burglars think: They live their lives as if waiting for the big score, which never freaking materializes. So do this today: Start saving a little from each paycheck for your retirement. It doesn’t have to be very much. Just let it be something. If you must trick yourself, pay a little extra to your emergency fund and then redistribute from that to a dedicated retirement account. We all think we’re going to live forever but that is not true. Time flies, and you may not have the time you think you have to build up a substantial nest egg. “I’ve a great life and a great career,” a ruggedly handsome, athletic-looking designer told us at a book fair recently. “I have tons of clients and I’m never without work. The problem is, I’m fifty-five and I don’t have anything set aside for retirement.” That’s a problem. Learn from this gent’s mistake. Start saving for retirement today, and let today mean today.

* This post first appeared in slightly different form on the FreshBooks blog on January 12, 2011.

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your free ebook, go here. Thanks — Joseph D’Agnese

The four, no, SIX bank accounts every freelancer needs

For tax season, I’m running some posts from my old blog pertaining to our book, The Money Book for Freelancers.*

The problems that arise with money and the freelance life are often ones of organization. If you set up your financial accounts properly, your financial goals will be right in front of you every time you check your finances. The way I see it, every independent worker (i.e., sole proprietor) should have at least FOUR bank accounts. I’m just talking about US workers right now.

1. The Spending/Bill-paying Account: The account into which you deposit every check you receive.

2. The Emergency Account: Contains 3 to 6 months of living expenses, if you can swing it.

3. The Tax Account: Collects the money you need to pay your estimated and annual taxes.

4. The Retirement Account: Collects the money you want to contribute to your retirement until you have enough to start investing.

I consider these accounts to be the minimum you must have to run a successful freelance business. Later, when you’re ready to advance, I’d consider adding two more accounts:

5. The Medical Account: Collects money for health insurance premiums, Health Savings Accounts (HSAs), and so on.

6. The Dream Account: Collects money for your future dreams: a house, an apartment, a car, a business, or for your as-yet-unborn children.

This is pretty much the advice we offer in The Money Book for Freelancers. You might think that keeping so many separate accounts is unnecessarily complicated. But we’ve found that if you don’t have a separate place to keep money earmarked for Retirement, say, you won’t save for retirement. You’ll find other, equally important things to spend that money on before you have a chance to save it. The same goes for the tax and emergency accounts. If you don’t consistently save money to pay your estimated and annual taxes, you’ll end up scrambling each quarter or as each April 15th approaches to find the money to cover your tax bill. So separate is smart.

Nearly every bank has some kind of online presence these days, but we like ones primarily based online—such as Ally or Capital One 360—for a couple of reasons:

  • Most online banks offer better interest rates than brick-and-mortar banks.

  • Most allow you to open a new account at will at any time, so you don’t have to bother making time to visit a physical bank and to talk to a flesh-and-blood bank officer.

  • Most allow you to apply a nickname to your accounts.

Little things make a big difference. Imagine logging on to your list of online accounts and seeing them in front of you with nicknames such as “My Rainy Day Account,” “My Waitin’ For the Taxman Account,” “My To-Be-Invested Retirement Account.” Names like this are focused on your specific needs, and far more personal than a list of account numbers that are virtually indistinguishable from each other.

Back in the day, we used to recommend keeping a local bank because it was still necessary to have an institution where you could drop by to deposit a physical check. Back then, the only way to get money into an online bank account was to transfer it from your local bank, or to mail in a paper check, which took daaaaaaaaays. Now almost all these online banks have an app that allows you to scan or photograph your check and deposit it in a flash.

How much should your save from every check? That’s a question for another day. For now, start investigating some good online savings banks at You will want a personal checking account for the spending/bill-paying account, and a savings account for the other accounts. US banking rules govern limit your withdrawals or checks you can write out of a savings account to 6 per month, but typically the interest on those savings accounts will be higher than your checking account.

Some savings accounts have an ATM card option, but it’s best to decline ones that do. The more obstacles you can put in your way, the less likely you’ll be to raid those accounts when emergencies occur.

Always check the interest rates. Historically online banks offered better terms than brick-and-mortar banks, but that’s not always the case.

* This post first appeared on my old blog August 30, 2006.

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your free ebook, go here.

Free Indieconf tix

Indieconf 2011

In 9 days, Denise and I will be presenting two talks at indieconf — “the conference for web professionals” — in Raleigh, North Carolina.

We did one talk last year and had a blast. The attendees were drawn from a mix of different professions but they were all somehow connected to web work.

Oh, and they were largely a group of freelancers. That’s key for my wife/coauthor and I because we’ve been freelancing for more than a dozen years and have published The Money Book for Freelancers, published by Random House.

Last year, our indieconf talk focused on things freelancers can do to take their finances to a new level. This year we’re switching it up and talking about how you can become a freelance money geek. 

What’s the diff? Well, we’ve noticed in the last year that a lot of people fail to grow their net worth as freelancers because they don’t really get jazzed about money. Don’t misunderstand this: Everyone loves money. They love having it. They love spending it.

But unless you’re an accountant, investment geek, or a financial obsessive, you’re probably not in love with the concept of finances. That lack of enthusiasm can lead you to make some mistakes, such as not investing regularly or not sending out invoices in a timely manner.

Our talk, entitled “How to Be a Freelance Money Geek,” is going to try to give you some basic tips for how you can warm up to the idea of interacting with your money on a regular basis.

The second talk, entitled “Publishing As Marketing,” will tell people how they can harness the self-publishing revolution to build their businesses. Most people are aware that they can easily publish an ebook today. But the excitement around doing this tends to focus on genre fiction. Everyone wants to crank out the next sci-fi/fantasy classic or some work of mystery, horror or romance. That’s fine. I’ve done it myself and will continue to do so. It’s fun.

But if you’re running your own business, you could tap your expertise and publish a book that will establish your credibility on a topic, grow your outreach list, and establish a new revenue stream. We’ll show you what we mean in this talk.

Tickets to indieconf are going fast. As I write this, you have 9 hours and change to sign up for the early bird rate of $129. After that, you have to pay $149 for this one-day event. 

The organizers of the event have given us EIGHT FREE tickets. So if you’re interested, here’s what you can do.

Broadcast this post via Facebook or Twitter. (Grab the 140-character insta-Tweet below)

Send me a note via email that you’ve done so. (Grab the email on my contact page.)

This is a first-come, first-served offer. Beyond giving these two talks, neither Denise nor I are affiliated with indieconf. We don’t get a dime of your conference fee, should you choose to attend. We just think it’s a well-run conference put together by some very fun people. We hope you’ll be able to join us, hopefully free of charge!

* * *

If you want to broadcast this post, copy this insta-Tweet:

#Freelancers: author @JosephDAgnese is giving away free tix to @indieconf! How to get one:

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your collection of free ebooks, go here. Thanks!

Creative Freelancer Conference notes here...

Denise Kiernan and Joseph D'Agnese book signing at Creative Freelance Conference, June 2011

We were in Chicago this past weekend at the Creative Freelancer Conference, sponsored by HOW Magazine. We had a blast, speaking to a sizable group about the principle strategies behind money management for freelance workers.

We told the group what we believe, namely, that freelancers don’t go into their line of work for the money, but many leave freelancing because they can’t make the feast-or-famine cycle of freelancing work for them. As any any successful freelancer knows, it doesn’t have to be a feast or famine cycle. The trick is knowing how to build a nest egg on your variable income, so you can build your net worth AND have a cushion to tide you over in case you hit  rough patch or the client flakes out a misplaces your invoice.

Our notes of the conference are here, and will stay up for two weeks. By downloading them, you’re agreeing to you them for your own education and not to disseminate.

Some interesting books about money and freelancing which we encountered at the conference:

Better, Smarter, Richer: Seven Business Principles for Creative Entrepreneurs, A Workbook by Jackie B. Peterson.

What to Charge: Pricing Strategies for Freelancers and Consultants, by Laurie Lewis

The Creative Professional’s Guide to Money: How to Think About it, How to Talk About It, How to Manage It, by Ilese Benun

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your collection of free ebooks, go here. Thanks!

Denise Makes the Paper

Author Denise Kiernan

I’m told nearly 1,000 women attended yesterday’s WISE women’s conference in Syracuse, NY, yesterday, where my wife and co-author Denise Kiernan was a speaker. There were tons o’ speakers, including make-up queen Bobbi Brown. 

But guess whose session made that city’s paper this morning?

We chalk up the spillover crowd to a couple of things: a kick-ass talk (if I do say so myself) and the public’s endless fascination with publishing, which was the topic of Denise’s talk. Actually, the title was “Publishing as Marketing”—i.e., how entrepreneurs can promote their businesses by publishing eBooks.

Yes, I am trying to post here more often. Thank you for noticing. If you want to sign up for my newsletter and claim your collection of free ebooks, go here. Thanks!