freelancers in nigeria

10 Valuable Financial Tips for Freelancers in Nigeria

by Adedoyin Awe

Freelancing is viewed as a long-term job by most freelancers. However, this is only possible if you have a long-term financial strategy. There are several disadvantages to freelancing despite its benefits, like independence and flexibility.

You’ll need to pay for your benefits, create an emergency fund, and adjust your plans to account for variable income. You may succeed as a freelancer and have secure finances simultaneously, though, if you have a sound financial plan.

In this article, I will take you through 10 Financial tips that will help you as a freelancer in Nigeria.

10 Financial Tips for Freelancers in Nigeria

  1. Have a financial strategy

Financial Strategy is one of the keys to unlocking success in any business, which includes freelancing, and the importance of financial planning can’t be overemphasized.

What is financial planning, and why is it important?

Financial planning is a long-term approach that enables you to cover your current and future expenses while minimizing the effects of unforeseen events.

Financial planning not only aids in managing the less appealing aspects of freelancing but also aids in covering the price of fixed charges (such as rent or utility payments).

The two disadvantages of being an independent worker are:

  • Inconsistent income.
  • A lack of perks or entitlements.

Freelancers must rely on their financial planning to handle these costs, unlike full-time employees of a firm who frequently have benefits and tools to work with. This is particularly poignant given the erratic nature of paychecks when performing contract labor.

Financial planning aids you in creating a secure future in addition to lowering your monthly expenses. Consider that you desire to purchase a home or have kids. Financial planning allows you to spread out your current income to pay some of these upcoming costs.

Planning your finances can also help you stay afloat in case your circumstances alter and help you prepare for career progression. With a solid financial plan in place, you’re less vulnerable to adverse events, such as the loss of a client or a decline in the market.

It’s a common occurrence to have a contract declined or postponed. That’s part of the insecurities of the freelancing industry.

Read Also: How to Become A Successful Freelance Writer In Nigeria

  1. Create long and short-term financial goals


Set your goals

As a freelancer in Nigeria, your savings plan can be integrated into your monthly expenses by setting short-term and long-term savings goals.

Completing short-term goals, which include spending on furnishings, vacations, home improvements, etc., is likely to take a month to a year.

Long-term objectives are any objectives that will take five years or more to complete. Your retirement account, mortgage, child’s college expenses, large debts, etc., are examples.

As you plan your long and short-term financial goals, make sure you: 

  • Clearly state your objective.
  • Determine the precise amount required to accomplish it.
  • Divide the task into reasonable, practical steps.
  • List your dreams so you can hold yourself to them.
  1. Keep to your budget

The main drawback of freelancing in Nigeria and globally is having an inconsistent income. That’s because it’s challenging to budget with erratic pay and cash flow. However, it’s crucial to develop a strategy that distributes your income, allowing you to pay for your current expenses while also setting aside money for the future.

The 50/30/20 rule is one of the most excellent methods for creating a budget.

Determine your fixed costs first. This includes your food, essential utilities, housing, transportation, insurance, daycare, bare minimum loan repayments, and so forth. Fifty percent of your income ought to go toward this.

Next, determine how much money you need to save for retirement, pay off debt, and other obligations; this should account for 20% of your income.

For spending on things you want, like entertainment, dining out, and vacations, you have 30% left over.

  1. Create an emergency fund

emergency fund

Have an emergency fund for unforeseen events

A bank account containing money set aside for significant, unforeseen needs is known as an emergency fund.

An emergency fund is a requirement for freelancers in Nigeria. Consider it as a life’s shock absorber that will prevent you from adding to the amount of debt you most certainly already carry. A huge spotlight has been placed on having an emergency fund during a crisis because of the coronavirus outbreak.

Without relying on credit cards or expensive loans, emergency funds help you maintain your financial stability as a freelancer.

Having an emergency fund can be especially crucial if you have debt because it can prevent you from taking out additional loans.

  1. Expand the sources of your revenue

One of the most important distinctions between an employee and a freelancer is that the former often depends on one reliable source of income while the latter depends on several.

Your cash flow will be more consistent with the more sources of income you have. The ups and downs that force you to use your emergency fund when your income declines are lessened. You are successful when your account balance regularly shows a surplus over your outgoing expenses.

A key component of freelancing is identifying new revenue streams. It will be necessary for you to look for new sources frequently.

For instance, there are many ways to find new clients if you work as a freelance writer. The two most common strategies are sending out pitch letters/cold mails to potential clients and engaging in referral networks.

You should make this part of your usual operating practice, and I can tell you as a freelance writer myself.

Do you like our freelancing tips? Follow us on Twitter for more!

  1. Have a good financial record

Getting separate accounts for your personal and company expenses is the first step to having an excellent financial record as a Nigerian freelancer. This enables you to derive the most terrific value possible from running a firm.

For financial management and waste reduction, larger companies have a whole accounting department. You must keep track of all business-related expenses because, as a freelancer, you are also the accounting department.

Freelance employment is unpredictable. Therefore, you must be very disciplined with your personal and professional finances.

Your inconsistent income and careless spending might lead to late rent payments, overdrawn bank accounts, and credit card debt if you don’t manage your money properly.

  1. Be health insured

When working as a full-time freelancer, you are not entitled to the same paid time off benefits as standard other employees. Sick days, vacation days, or different types of paid time off are not usually included in the freelancing world.  You will not get compensated if you choose not to work.

It’s not easy for freelancers in Nigeria to navigate the insurance system. You need to examine various instances that you could neglect if you had dependable benefits and coworkers to cover for you at work and acquire your health, dentistry, and vision insurance. Your life and health need to be insured for enhanced productivity.

Read Also: 8 Soft Skills You Need for Successful Freelancing

  1. Stay off from bad debts

A bad debt is any expense that happens after a customer’s payback (after credit has been granted) is no longer seen as being collectible. In other words, bad debt is an uncollectible obligation. There is always a danger that a customer’s situation will change and they won’t be able to make the full payment as planned, so any firms that give their clients credit need to prepare for the likelihood of bad debt.

Debts can be good and bad, but as a freelancer in Nigeria, always make it a priority to avoid bad debts, debts that don’t bring you closer to achieving your financial success.

Read Also: Pros and Cons of Freelancing in Nigeria

  1. Invest


Become an investor and get huge returns

An incredible approach to guarantee your future, especially if you’re a freelancer, is to invest money. Unfortunately, freelancing income is sometimes unexpected and inconsistent, and many independent contractors are too exhausted to consider their options.

Making your first trade and depositing your funds are the initial steps in investing as a freelancer. This is important since putting all your money into one investment will raise your risk and leave you in a big mess if you drop the basket. As a result, invest in a diverse portfolio of securities.

  1. Increase your income

To have more money, though, one of the simplest methods is to be paid more. So if you can increase your marketing efforts, do so. Consider asking for a raise if you have clients with whom you have worked for more than a year and with whom you get along well.

Simply having more money will help prevent you from experiencing a cash-flow issue if you’re sloppy with some of the cash-flow management advice I give below. (I assure you that you can follow the remainder of these suggestions regardless of your client’s circumstances.)

Instead of offering rock-bottom prices for your work, charge reasonable, professional fees to stay financially fit and stable.

Bonus Tip

Observe Cash-Flow Patterns

I strongly advise cash flow tracking if you’re experiencing financial issues as a Nigerian freelancer. Where does your money go? When and where does your money arrive? You frequently lose track of where all the money goes in the hurry of work and family life.

Maintain a profit-and-loss sheet that shows your cash balance at the start of the month, income, outgoing expenses, and your cash balance at the conclusion. In a few months, you’ll start to notice patterns.

Is your bank account growing or steadily shrinking? Is there a particular client whose persistent late payments are the main issue?

To determine which clients receive your lowest hourly rate, you may also keep track of your hours for a month. 


It is insufficient to sign up a new client or seal a deal on a pricey project. You need to learn the art of managing your money and optimizing your profits if you want to succeed as a freelancer.

Allow this post to point you on the correct path, but never undervalue the value of collaborating with the best financial experts and counselors!

We have a webinar coming up November 2022 focusing on entrepreneurship. It will help you as a freelancer. Join our Whatsapp Community to get real-time updates.

Related Posts

Leave a Comment

× Say hi
Update Required Flash plugin