How to Create a Freelance Financial Plan (My Annual Planning Process)
Every January, I spend 2 hours creating a one-page financial plan for the year. It covers revenue targets, savings goals, rate adjustments, and key financial milestones. It’s not complicated. It’s not fancy. But it gives my entire year direction.
Before I did this, I was reactive — making money and spending money without knowing if I was on track for my goals. Now I know exactly where I stand at any point in the year.
My One-Page Financial Plan Template
Revenue Target
- Annual revenue goal: $110,000
- Monthly average needed: $9,167
- Revenue sources: 3 retainers ($7,500/mo) + projects (~$1,667/mo average)
Income Allocation
- Taxes (28%): $30,800
- Business expenses: $7,500
- Personal salary ($4,500/mo): $54,000
- Retirement contributions: $11,800
- Business reserves growth: $5,900
Savings Goals
- Emergency fund target: $15,000 (already there — maintain)
- Retirement: $11,800 ($4,800 SEP IRA + $7,000 Roth)
- Vacation fund: $3,000
- Equipment replacement: $2,000
Rate Strategy
- Current rate: $130/hour (project equivalent)
- January adjustment: Raise to $140/hour for new clients
- Existing retainer adjustment: +8-10% effective February
Quarterly Checkpoints
- Q1 (April): Review YTD income vs target. Adjust Q2-Q4 projections.
- Q2 (July): Mid-year review. Rate check — is pipeline healthy?
- Q3 (October): Year-end planning starts. Tax strategy review with CPA.
- Q4 (January): Annual review. Set next year’s plan.
How I Build the Plan
Step 1: Review Last Year (30 minutes)
Pull the annual P&L from FreshBooks. Note:
- Total revenue (actual vs. target)
- Revenue by client (who paid most?)
- Monthly income distribution (peaks and valleys)
- Total deductions and effective tax rate
- Profit margin
Step 2: Set This Year’s Target (15 minutes)
My target = desired take-home + taxes + expenses + savings goals.
$72,000 (take-home) + $30,800 (taxes) + $7,500 (expenses) + $11,800 (retirement) = $122,100
I round to $110,000 as my target because retainer income already covers $90,000 and I’m conservative with project projections.
Step 3: Plan the Income Sources (15 minutes)
- Retainer Client A: $3,000/mo × 12 = $36,000
- Retainer Client B: $2,500/mo × 12 = $30,000
- Retainer Client C: $2,000/mo × 12 = $24,000
- Retainer subtotal: $90,000
- Project work needed: $20,000-30,000
That means I need roughly $5,000-7,500 in project revenue per quarter. Very achievable.
Step 4: Set Rate Increases (15 minutes)
Review market rates, factor in inflation and skill growth, decide on increase percentage. Draft client notification emails.
Step 5: Define Financial Milestones (15 minutes)
What specific financial goals will I achieve this year?
- Max out Roth IRA ($7,000)
- Contribute $4,800 to SEP IRA
- Save $3,000 for vacation
- Build equipment replacement fund to $2,000
- Maintain emergency fund at $15,000
The Quarterly Review (30 minutes each)
Every quarter, I check:
- Revenue: On track with annual target?
- Savings: Tax savings account healthy? Retirement contributions on schedule?
- Pipeline: Enough work lined up for next quarter?
- Rates: Any clients due for adjustment?
- Expenses: Any subscriptions I can cut?
If I’m ahead of target, great — maintain or increase savings. If behind, I increase marketing/outreach for the next quarter.
The Bottom Line
A financial plan doesn’t have to be complex. One page, 5 sections, reviewed quarterly. It takes 2 hours in January and 30 minutes per quarter to maintain.
The value isn’t in the plan itself — it’s in the clarity it provides. Knowing your revenue target, savings goals, and rate strategy means every financial decision has context. “Should I take this $2,000 project?” is easy to answer when you know you need $5,000 more in project revenue this quarter.
Plan intentionally. Review regularly. Adjust as needed. That’s freelance financial planning.