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How to Save for “Retirement” as a Freelancer

I have a confession to make. I am a financial planner and I’m not saving for retirement.

That’s right, you heard it here first.

I was saving for retirement at my old job that had a 401k matching program. They matched up 50 cents on the dollar up to 6% of what I put in so I shrugged and made the contributions.

I’d been told by everyone around me, financial advisor or random person on the street, that saving for retirement was the most important thing I had to do.

Then I started meeting clients for Brunch & Budgets and asking them what I thought was a very thoughtful and important question – what does retirement mean to you?

Want to know what I heard back?

Meh, I don’t ever plan to do that.”
I’m just going to figure out what I love to do so I can do that forever.
Well, I guess that I can choose to work only if I want to?

I was shocked by the responses, so much so that I turned the question on to myself. What did retirement mean to me?

Did it mean I was going to work at a desk for 40+ years and cross my fingers that I had accumulated enough money while keeping my desired lifestyle in check that I could one day throw my hands up and say, okay, that’s it, I’m retired?

I don’t know about you, but that sounded like the worst case scenario in my head.

Here’s what did sound exciting to me:

  • Being able to work from anywhere in the world so I could travel at a moment’s notice.
  • Having multiple streams of income that I could tap into and tap out of based on market demand, my own personal goals, and the amount I wanted to work or not work.
  • Having a chunk of money squirreled away (not $1.4 million or whatever my retirement projection told me) so I could take breaks between work and not lose sleep.
  • Having most of my revenue come from doing work that I love to do so I could see myself doing it forever.

That’s when I realized – I’m not looking for early retirement, I’m looking for financial independence. And this is really what my clients are looking for too.

Here’s what exciting. The freelance life is the absolute quickest and best way to get to financial independence. You have the flexibility and control to make your own hours, create and find your own work, and to choose your rates.

It may feel like less of a safety net than working a 9-5 and getting a steady paycheck, but really, it’s a thousand times less risky than counting on one person or company to supply your entire source of income.

Lose a client and you lose part of your revenue. Lose your job and you lose all of your revenue.

There are three simple steps to creating financial independence and doing it sooner rather than later:

  1. Develop multiple streams of income
  2. Save a chunk of everything you make
  3. Indulge in only the things you truly value

This is definitely easier said than done, so let’s dive deeper into each of these:


Notice I did not say it has to be passive income. I think we get caught up in thinking that our income needs to all come from some entity over there making money for us while we chill on a beach.

That sounds nice and all, but really only for so long. Then I’m itching to start getting back to work. I hope you all have that feeling when you think about your day to day.

Developing multiple streams of income simply means that your money isn’t coming from just one source. That could look like:

  • Having several medium-size clients instead of one or two big clients.
  • Tiering your services into different packages to appeal to different demographics.
  • Offering online courses in addition to your one-on-one work for customers who are looking to pay a lower price point.
  • Creating a monthly retainer model for ongoing services.
  • Speaking or hosting workshops (the best part about this one is that you’re also marketing yourself at the same time!)

It could also be mostly passive and completely unrelated to your field. For instance, I don’t live in my whole house – I rent out an upstairs unit so they help pay for my mortgage.

I also list my home on Airbnb when I’m traveling. When my travel schedule gets less hectic, I plan to list my place on and watch other people’s dogs when they’re traveling.

Developing multiple streams of income just means getting your hustle on a little, especially when you’re starting out. It’s the crux of freelancer life.


In the beginning, a chunk could mean $20 in your first month. The amount doesn’t matter so much as building in the habit of saving while you’re ramping up your income. Think of this money is going towards the greater good of you getting to financial independence sooner rather than later.

Creating a habit of saving a chunk of everything you make means instead of trying to accumulate some kind of insanely huge amount of money to spend in 40 years, you’re constantly just saving as you go.

It will also prevent serious lifestyle creep.

There are a few ways you can think of this:

  • Save a percentage of your income every month. Because your income will be variable, choosing a percentage to save is usually more manageable than an amount.
  • Find your Minimum Viable Income (MVI) number. Figure out exactly the amount of money you need to squeak by for the first 6-12 months and save every dollar you make over that amount.
  • Choose an income stream that all goes to savings. Some of my clients have been able to live off their part-time job and save all their freelance income.

Others have an income stream that comes in sporadically so they can’t count on it for their living expenses. If you have an income stream you feel you can dedicate entirely to savings, I would go this route.

Grow your savings until you hit about 6 months’ worth of living expenses. It won’t necessarily be steady or consistent growth (because, hello, we’re freelancers), but it’s a good target number.

Keep this money in cash and use it to expand your business or get through low-earning months.

Once you have more than 6 months’ saved, it might be time to consider putting some money into an investment account, as long as you don’t plan to touch it for the next 5-10 years. I’ll save the details on this for next month’s blog post :).


I know when I had a full-time job and was getting a regular paycheck, the consistency of the money coming in plus the grind of the 40 hour work week meant I was a little more frivolous with my money than I could have been.

Getting a steady paycheck lulls you into a sense of security that’s hard to shake. It means you don’t question where you money is going because it feels like it will always get replenished.

Whether you’re working for yourself now or looking the make the transition soon, start asking yourself why before you make every purchase. You don’t have to change your behavior or your habits, just become more aware of them.

I started doing this a few years ago, in preparation for transitioning into freelancing full-time, and suddenly, shopping for clothes mattered less and I canceled my Seamless account after shedding a tear for all the money I spent ordering meals in that I don’t even remember eating.

I now do semi-annual clothing swaps with a group of girlfriends and get a free new wardrobe twice a year. I make most of my meals at home and eat an amazing meal once or twice per month.

The best part is though, I have way more money socked away so I can travel regularly throughout the year because this is what I learned really matters to me.

Pamela Capalad I’m a Certified Financial Planner™ and I’ve been in the financial industry for over 7 years. I wanted to find a way to help the average person with their finances. I also realized it’s a pretty scary thing for people to face, even though its something we have to deal with every day. One day, I was sitting around a fire pit with a friend and she said she really needed help with her money, but was afraid to talk about it. I said we should do it over brunch. Immediately her shoulders untensed and her eyes lit up. “Yes! Let’s do, like, a brunch and budget!” And the rest is history. Catch me on the internet radio waves or find me on Facebook, Twitter and Instagram .

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{ 7 comments… add one }
  • The idea of “retirement” is something I’ve been thinking about a lot lately. I’m leaving my government job in TWO WEEKS! (Ah!) People keep asking me about my savings situation. Because there isn’t a clear answer to what “retirement” is, it’s hard to plan. Am I being irresponsible by leaving this job? Maybe. Is my heart telling me to run as fast as I can? You-betcha! Saving isn’t off my radar, but finding what I value is wayyyyyy more important.

    • OMG congratulations! Leaving a government job is particularly tough because they have so many more benefits that make you feel “secure” about “retirement.” I’ve found that when it comes to what people value, it boils down to having freedom and security. I’ve also found that you can build security with freedom, but you can very rarely create freedom if you start with security. Good luck and way to take the leap!!

  • I’ve been thinking about this a lot in recent times. I don’t know necessarily that I will ever want to retire fully, but what matters to me is having a safety net in case I can’t work for one reason or another. And also to make sure we can provide for my special-needs son throughout his life regardless of the level of independence he achieves.

    My husband has a job and a retirement plan there, so our efforts are a mix of things all aimed toward financial independence and security.

    • I feel you, Alejandra and thanks for sharing! Having a safety net is a critical part of a financial plan. It’s just a matter of how large a safety net you need to feel comfortable and secure. It also sounds like something you and your family particularly value, especially so you can provide for your special needs son. It’s great that you and your husband are on the same page about this, it’s a delicate balance for sure!

  • What a smart and insightful post. Looking forward to next month’s!

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