Holiday budgeting can be challenging for any household. When one or two of your incomes are dependent on freelance, it gets even harder. Most frugal freelancers pay for their monthly expenses using funds generated from the month before, and they have an emergency savings account to cover any gaps that can occur from month to month.

When you add the cost of holiday gift giving, hosting a holiday party and getting a few more holiday decorations, it can be a tremendous strain on your finances. This year is especially rough, and money is tight for everyone. According to the National Retail Federation (NRF), two-thirds of American families are going to be adjusting their holiday shopping plans.

Before you go to the mall and start spending, here are some things to consider, when coming up with your holiday budget:

To Gift or Not to Gift

It takes a lot of time to network, cultivate relationships and gain long-term, valuable clients. Most businesses participate in the holiday season by sending appreciation gifts to their client list to keep themselves Top of Mind and ensure that in the New Year, business will continue to come their way. It doesn’t hurt to make sure your clients know that you appreciate them, but it will be another holiday expense that takes away from your household budget.

If you have any talent with HTML and Photoshop, you can make a personalized holiday greeting, saving on cards and postage. You still let your clients know that you’re thinking of them without breaking your budget. If that’s not your talent, AmericanGreetings.com and other e-Card services could be useful.

Also, if you have to choose between a cheap promo gift, and not giving anything at all, my advice to you is to avoid the gift. A bad gift can stick in a client’s mind, coloring your future relations with them.

Don’t Count Your Dollars, Before They Come In

Even the best paying clients can lapse during the holiday season. Holiday pressures for business owners to provide bonuses and host holiday parties can divert cash flow and cause your otherwise prompt payers to sit on your invoice for thirty days. You should never count on that “check in the mail” until it arrives.

If it’s an existing client, look back at last year’s payment schedule. It should give you a pretty good idea of how they’re going to handle your invoices this year. If it’s a new client, don’t count on anything until the money clears in your checking account.

Avoid Robbing Peter to Buy Paul a Gift

It might be tempting to dig into your emergency savings account or divert some household budget to cover your gift giving, but it’s really a bad idea. A freelancer’s income is always fluctuating and you can’t count on anything in this economy. If you dig into your savings account, and a real emergency happens, such as your car breaking down or a power surge frying the computer you do your freelance work on, you might not have the money to get you through that financial crisis.

Put Down the Credit Card

With the recent passing of the Credit CARD Act of 2009, many creditors have cut credit limits, increased interest rates and added or raised fees. The cost of maintaining a credit card balance has gone up for many consumers and if you’re a freelancer that’s on a tight budget, you might find that the cost is too great. Think about it. If you charge your holiday expenses on the credit card, and after the New Year go through a period of little to no work, you could find yourself in quite a bind. Charging your holiday gifts without a guarantee that you can pay it back in a timely manner can lead to a future financial disaster.

If you’re a freelancer that’s not on a budget, it’s never too late to start. Mrs. Mica created a great series last February on “Where’s My Money Going?” which challenged readers to track spending and use that report to make a better budget. Take care of your finances so it doesn’t interfere with your enjoyment of the holiday season.

About the Author:
Kathryn Katz is a single mom, internet marketer and professional copywriter. Kathryn is a Certified Personal Finance Counselor and works for Consolidated Credit Counseling Services. This non-profit credit counseling agency offers a variety of educational booklets, including a Holiday Survival Guide.


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–› Plan and Budget for Holiday Spending
November 25, 2009 at 3:55 pm

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Financial Samurai November 21, 2009 at 10:43 am

Kathryn – Want to do some copyrighting and editing for me? What a pain in the bum to do it all as a small time site publisher! :)

With my site, I LOVE to pretend this is the only “job” I have in the world. Do or die! Write something good and interesting, or not is what goes through my head at times.

Is all your income from freelancing Kathryn?
.-= Financial Samurai´s last blog ..Everything Is Relative Superstar – Being Happy With What You Have =-.

Cath Lawson November 25, 2009 at 8:31 pm

Great advice MM – so many people just don’t get round to paying you before Christmas. So, as you say, it’s best not to rely on it.

I have five kids, so it’s really tough. But I’ve always had a policy of not buying presents for adults unless we can really afford it.

OH family seem to have a hard time getting used to this “non-present giving”. Last year, I took ages to handmake a gift for them and they didn’t even thank me for it.

Materialism really does bring out the worst in people.

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