I am freelancer who was earning £43k – until I lost 4 months’ earnings during the pandemic. Here’s how I’m managing my money

I am freelancer who was earning £43k – until I lost 4 months’ earnings during the pandemic. Here’s how I’m managing my money

Welcome to Money Matters: GLAMOUR’s new weekly dive into the world of finance – your finance. These uncertain times have reminded us just how much understanding our money matters and yet… how little we talk about it and how much it’s shrouded in secrecy.
This stops now.
Keen to break that money taboo, we’re chatting all things personal finance from daily budgets to ISAs and pensions. Each week, a woman in a unique situation will give us an honest breakdown of her finances, and our expert will tell her easy tips on exactly how to tackle it. So, grab a cuppa, take a seat, and let’s talk about money…

Lisa* is a 28-year-old Londoner who travelled the world for a while after graduating from university seven years ago, and now works as a freelance film producer. This is her money month…

I did several years of unpaid internships and free work before I started to get paid as a film producer. I’m not from a wealthy background and couldn’t afford to work for free (I’ve had no financial help since I was 16, but have always been gifted a roof over my head) so have been working (read: exhausting) myself by working any cash-in-hand job I could get my hands on since I was 17. At around 17 I also inherited around £10k from a grandparent, which I have always used as a safety net. Whenever I’ve dipped into it over the years I’ve always replaced that amount from my next pay cheque.

Over the past three years my career has cemented itself and I’ve worked full-time in production on freelance day rates and short contract gigs – the longest ever was three months. Work for me felt a little unstable until mid last year, but had been getting more and more consistent from then up until Covid-19 struck. The work I do means that I work on short projects very intensely and become quite consumed working all hours of the day and night for a couple of weeks, and then take a couple of weeks off afterwards to rewind and recover. Most of my friends have more traditional 9-5 jobs, so because of this and how I like to pop on holidays quite often, I didn’t think it was wise to rent a place. I was never in London for very long, and friends weren’t up for living with someone with such an inconsistent income and schedule.

I’ve been living at ‘home home’, paying only a little in rent for the past few years, so pre-Covid-19 I was managing to put away about half of my earnings (20%-ish for tax and the rest as savings) and have accumulated a sizeable chunk of savings by doing this. My main priority now is to get some stability in both my work and living situation and to move out of home.

But I feel like renting during these strange and uncertain times could mean burning through my savings. And I’m also waiting to see how my industry picks up, because as it stands I’ve only made about half of what I did last year as I’ve just had four months of no work at all. I also wasn’t entitled to any government support as I’m a director of a Ltd company. When I started out working freelance, I was told by an accountant that this was the best way to work financially. It also works well for me because it mitigates liability when I take on work, so if anything ever happens its my business that’s being dealt with rather than me as an individual. Of course during C19 this has been a nightmare and I’m one of the ones that have ‘fallen through the cracks’. Things seem to be slowly picking up in terms of work in my industry but I am currently working on a passion project as I haven’t been offered any paid work yet.

Sometimes I wonder about getting a mortgage, but then I realise how bad I must look to a lender. And then I pour a glass of wine and look at flights…


Current account: £600
Savings account: Easy access savings account (attached to my current account) – £6,500. £3,500 of this is saved to pay for my tax bill that was due to HMRC in April, but payment was postponed. I thought it was best to hang onto it because I didn’t know how long I wouldn’t work during lockdown and it’s not due to be paid until January 2021 now. I’ll pay when work becomes more consistent though, to get it off my mind.
Premium bonds: £50,000. This is the max amount you can have in premium bonds. I’ve kept my savings in here since I was a child and last year saved half of all my earnings and put it straight into here to save and use for tax bill. I’m a massive commitment-phobe, so this works for me so I know that I always have access to the money if I needed it rather than keeping it in a fixed account. I also like the fact that there is a prize draw, I think of myself as quite lucky and most months win at least £25. I figured my winnings are around the same as I’d make in interest if the money was in a fixed rate savings account or ISA but I still have the chance to win more.
ISA Account: £8,000. Opened two years ago, have maxed 20/21 yearly allowance now – will spend on buying a house whenever that might be…


Monthly wage: Varies wildly. My earnings last year were £43,000 pre-tax, so around £3,500 per month as an average, but there are huge fluctuations as to how much I earn month on month.
Monthly wage post Covid-19: I’ve only been working again since May when the industry opened back up and I’ve made £2,000 so far, I’m working on a job for free at the moment to keep myself engaged and relevant. As I basically make art for a living it’s actually kind of fun to just do a project for the love of it and not get paid. Even better if I can do a project AND get paid, but beggars can’t be choosers right now was my thought.
Any other incoming payments: No


Rent: £200 to my mum every month. I also give her extra chunks (usually £500) whenever I get a decent sized (£3k+) invoice paid.
Bills: Phone £20, Website/self promo £18.50, Adobe £16.50, Banking £10, Members’ club £80, Accountant fees £100, Classpass £25 (on hold)
Usually loads on travel – taxis and Tubes. No idea how much on the Tube but a lot.
Other: Foreign travel/holidays. For the last three years I’ve worked 11 months of the year and taken the 12th off to travel – that’s my incentive to myself to work hard during the year. I also usually do two or three other small trips per year with friends.
Splurges: In normal life I go out for dinner and drinks a fair bit (nowhere too expensive, but three-five times a week) and take a huge amount of cabs, maybe £300 or £400 a month. I tell myself that’s OK because I’m living in Zone 4 in London. I very rarely buy clothes but when I do they tend to be fairly expensive. Most of my friends are also in the creative industries but don’t earn as much as I do, we tend to hang out at people’s houses or at pubs and bars.
Weekly budget: I’ve never worked out a budget, but I tell myself that I spend £1k or less a month. Not sure how true this is.
What I spent this month: I bought a designer jacket in the sale (£600 down to £280) Apart from that, petrol for the car £50, a couple of takeaways for my family, a birthday present for my sister.


Student loan: £24,000. I’ve paid off £100 of this only so far, had never earned enough to need to pay until last year and got a bit of a surprise.


What I want to save for: A place of my own/house/flat. I’m desperate to move out. I’m open to renting but would prefer to buy. Getting a home of my own is pretty much all I’m thinking about at the moment, and frustratingly I know that I’d have a decent deposit to buy somewhere other than London, but I’d never want to buy anywhere except London. I’ve had to help out my family financially quite a bit during lockdown so would like to recover those costs when I can. Would quite like to buy a car too, just a banger.

How I want to plan my money for the future: At the moment I’m not really thinking about the future, everything feels so up in the air that all I’m trying to do is get through the week, and then month and then start trying to get through that again.
Once things are settled on the Covid-19 front, I should probably get a pension or something, I’ve only just started paying NIC so I don’t think I’m even entitled to a government pension as it stands. I’d quite like to get private healthcare in the next few years too.
My worst money habit: This is probably for the best, but I forget about my savings and only look at what is in my current account and easy access savings account. This sometimes gets quite low because as soon as I’m paid anything I put half away (for tax, and then the rest becomes savings) so if I have a long work gap my current account can get very low. Of course I do sometimes take money out of savings if I get desperate but I’ve been quite lucky and haven’t had to do that much over the last 18 months.
Other bad/good habits include: not really knowing where money’s gone, not really knowing how I’ve saved it. Generally always being surprised at myself and my squirrelling abilities.
My biggest money worry: That I’ll spend all my savings on renting and deplete them down to nothing OR live at home forever.
Current money mood: ? ? ?


Get ‘appy The idea of a budget and knowing exactly where your money is going might conjure up visions of spreadsheets and paper bank statements, but we can all breathe a sigh of relief – those days are long gone. To save you from a world of budgeting pain are an array of banking apps which cleverly connect to all of your accounts so you can view your cash in one place. There’s Cleo, Emma, Money Dashboard and then smart banks like Monzo and Starling.

Think twice I know you must be itching for some freedom and wanting to move out ASAP, but having the security of a roof over your head and no mortgage to pay is a huge benefit right now. Before making the big jump, see how your industry fares, seek advice but don’t make any rash decisions based purely on emotion. Make sure home-ownership will be an affordable choice, even during a recession.

Chat to a mortgage broker Getting a mortgage as a self-employed person isn’t as complex as some make out but it does require a little more planning and hoop-jumping. Depending on the lender, you’ll need between one-three years of accounts as proof of your income – it’s worth flagging that you plan to buy with your accountant. Next, your best bet is to chat with an independent mortgage broker who can help you find the best deals.

Bag the free money! The best thing you can do for your financial future is to set up your pension. While the employed can enjoy automatic enrolment into a pension scheme, most self-employed are worryingly unprepared for later life with only 18% paying into one. Don’t forget that you’re missing out on a 25% tax top-up from the government, that’s a free £25 for every £100 you pay in. If you don’t want to manage the pension investments yourself (this is called a self-invested personal pension) then a personal pension or a stakeholder pension is your best bet.

That’s an expensive accountant £100 a month, that’s £1,200 a year! I know of small businesses with employees who pay their accountant less. Just make sure you’re getting the best deal you possibly can and aren’t paying for add-ons that you don’t need. I’d recommend giving your accountant a call to negotiate.


Source: Glamourmagazine

Flexgigzz Editor

Author Since: June 19, 2020