08/24/26

Depending on which study you read, somewhere between about 30% (Bank Rate, 2025) and 50% (QuickBooks, 2025) of Americans have some sort of freelance or side hustle income. And if you are drawn to creative fields, freelancing or side-hustling will likely be part of your existence. 

The good news: That comes with freedom, control, and fulfillment. 

The bad news: It comes with some financial challenges. 

We asked Denison Edge instructor, Dr. Elaine Grogan Luttrull to answer the top three questions students have about freelance (finance) life to help them prepare for this inevitable (and exciting) existence. 

Q1: How can I budget with inconsistent monthly income?

If you ask AI how to budget, you’ll likely get a reasoned, financially informed response about starting with your take-home pay and allocating it toward expenses: First the non-negotiable ones, then the discretionary ones. 

That’s great advice. But it doesn’t work if you don’t know what you are going to earn each month. 

So how can you budget with inconsistent monthly income? Easy. Start with what you know: your expenses. 

Figure out what you need to spend each month to exist in the way you want to exist. (You don’t have to embrace a poverty mindset here, but your number should be grounded in reality: caviar each night for dinner might not be part of a realistic plan, but occasional meals out or delivery service might be). 

Once you have your expense number (per year or per month), divide it (roughly) by 0.6. That will get you close (ish) to an income estimate that will allow you to save 10% of your income for yourself and 30% for your taxes. 

What does that look like? Let’s pretend your monthly spending is $3,000 to cover rent (with two roommates), utilities, food, a car payment, some social costs, and student loan repayments. (And let’s also pretend you’re still on someone else’s insurance and cell phone plan to keep your costs low.) Then, let’s roughly estimate your business costs (website, supplies, etc.) to be $500 per month. 

If you divide $3,500 by 0.6, you’ll get $5,833. If you earn that amount per month, you’ll be able to save $583 (10%) for yourself and save $1,750 (30%) for your taxes. Then, you’ll have $3,500 leftover for your personal expenses.

Once you know your earnings goal, the rest is easy. You just need to reach it.

Q2: How do I reach my earnings goal?  

Great question! To figure out how to reach your earnings goal, we need to translate the goal into something that aligns with what you do. Crudely, we’re talking about quantifying what you are selling and doing some math to ground the number into something you can control. 

If you are a visual artist selling work for $1,000 per painting, an earnings goal of $5,833 sounds like six paintings per month. If you are a project-based designer, an earnings goal of $5,833 looks like three retainer clients, each paying $2,000 per month for up to 40 billable hours. If you are a musician, an earnings goal of $5,833 might look like 8 students paying $75 per weekly lesson, plus seven gigs averaging $500 each. If you are a writer, an earrings goal of $5,833 might look like a part-time tutoring job (paying $3,750), a $500 grant, and an after-school writing education program (paying $1,500 per month). 

The math doesn’t have to be perfect, but it needs to help you quantify your goal. How many students do you need to teach? How many gigs do you need to do? How many projects do you need to land? 

Knowing that information as a freelancer can enable you to build the runway you’ll need – in clients, projects, gigs, or opportunities – to support the life you want to build. 

And if you’re not there yet, that’s okay. Part of building the runway is the building part. It takes time to build something sustainable. And once you’ve built it, it might be time to leave your 9-5 job. 

Q3: How do I know it’s time to leave my 9-5? 

Having a 9-5 job is kind of like being paid to go to graduate school – if you take advantage of the lessons it offers. If you pay attention to client development, the use of systems, the way contracts are structured, the way relationships are developed, and the way personnel conflicts are handled, your first 9-5 job can double as a mini-MBA. (Okay, that might be overstating it – But it can give you some crucial insights into the expertise you’ll need as a freelancer.) 

Having said that, at some point, you might be ready to leave your 9-5. Maybe you crave the freedom of directing your own projects. Maybe you want to focus your time on a niche area instead of being a generalist. Maybe you need more flexibility in your schedule. Maybe you have simply outgrown your current role. 

If it’s time to leave your 9-5 (on your terms), you’ll want an income runway and a financial cushion. 

Your income runway is the pipeline of projects or relationships you have in the works. In a perfect world, it wouldn’t take long for you to replace your 9-5 income with other income (which is why starting to earn on the side is such a powerful strategy – you can build the runway while you have the security to build it patiently). 

But beyond simply building the runway, it is crucial to also have a cushion. Freelance income can be unpredictable, but your expenses are not. Your utility company won’t care that musicians don’t perform much in January. You’ll still have to pay your electric bill. 

To avoid the whiplash of feast or famine mode as a freelancer, you’d have a cash cushion to cover at least three months of your expenses (and depending on your industry, possibly up to 12). This would be somewhere between $10k and $42k for our original example artist, whose expenses totaled $3,500 per month.  

With that level of cushion, you won’t have to worry about paying your bills on time (or not paying off your credit card each month). And if you must use your cushion (which you inevitably will), you can replenish it to keep it somewhere in your target range. 

Now What?

These three questions are really only the beginning of what it takes to manage the financial side of your creativity.  Elaine has worked with thousands of creative individuals to help with the business side of their creativity, and she’ll be visiting Denison this academic year to go more in-depth on money matters. Check out related programs below.