How to Solve Freelance Cash Flow Problems, Step-by-Step

It’s officially summer and if you’re like me, you might have seen your freelance work slow down this month. 😬

One of my main clients is an agency, and I usually work with them on several projects per month…but over the past 30 days, things were consistently delayed while my contacts at the agency (and their clients) took summer vacation. 

Thankfully, I have retainer clients, so I was still able to pay my bills this month—but it was definitely a wake-up call. I wasn’t able to set aside much for savings, make additional debt payments, or invest in the new team member I’ve been wanting to hire. 

So today, I want to share a few tips for solving your freelance cash flow problems, whether you’re wondering how you’ll make your next rent payment (because I’ve *definitely* been there), or you just need to bring in some extra cash to reach your summer financial goals. 

Here are the 4 steps to solving your freelance cash flow problems:

1. Take ownership 🙏
2. Regulate your stress response 😵‍💫
3. Address the short-term crunch 💰
4. Commit to a long-term solution 💸

Step 1: Take ownership 🙏

If you’re in a cash flow situation right now, you might be feeling desperate, anxious, and overwhelmed. 

I know exactly how you feel—I’ve seen my checking account overdrafted by $800, I’ve had clients ignore my invoices, and I’ve been frozen in fear, hating myself for being in this situation. 

And while I do want you to be kind to yourself, I first want to encourage you to take ownership of your situation. I want you to look in the mirror and say, “Yep, this is my fault.”

Maybe it’s really not your fault. Maybe a client really did refuse to pay your invoice. Maybe you did have an unexpected bill. But as long as we believe our problem is someone else’s fault…we’ll be forced to wait for someone else to fix it. And that’s not very empowering.

If everything is your fault, that means there are a lot of things in your control. Maybe you could’ve…

• Built up an emergency fund, so that when that client paid you late, it wasn’t an immediate emergency 
• Diversified your revenue, so that when your biggest client decided to cancel, it didn’t cut your income in half 
• Continued marketing your business, even when you were busy, so that when that big project ended, you already had the next one lined up 

When you take radical responsibility for your circumstances, you'll be more likely to take radical steps to improve your situation. You'll be able to see where you do have power, instead of feeling frustrated about things that you have no control over. 🙏

💡 This is a principle I learned from the Stoics. If you’d like to learn more about it, I’d recommend the book The Obstacle is The Way by Ryan Holiday or this short blog post that sums the concept up well.

Step 2: Regulate your stress response 😵‍💫

All that said, there’s a big difference between taking responsibility for your actions, and relentlessly beating yourself up for your actions. 

You might think you deserve to feel like crap because you’re in a bad situation. You might really believe you’re irresponsible, bad at business, or whatever else. You might even think you need all these negative thoughts to motivate yourself to change. 

However, personally, one of my highest values is sustainability. And negativity is not a sustainable fuel for getting what you want from life. 

Anxiety is not a sustainable way to motivate yourself

Anxiety is a fight-or-flight response, which means it directs blood away from your brain and towards your legs—so that you can fight or run away. 👊 That means anxiety/stress actually makes us less creative, less strategic, and less capable of solving the problem in front of us. 

So when you’re dealing with a freelance cash flow problem, should you talk to yourself in a way that increases anxiety (and makes you less smart), or should you talk to yourself in a way that calms you down (so that you can make smarter decisions)? 

I think most of us would go with the second option.

3 ways to manage cash flow stress

So how do we calm down when we feel like the world is falling apart around us? Here are a few strategies to try: 

• Guided meditation/breathing: When you’re in a heightened emotional state, it can be helpful to have a meditation designed specifically to help in that kind of moment. For example, the Waking Up app has a few meditations specifically for life’s “WTF” moments, and they’ve helped me SO much. 
• Get moving: I know, obvious, but I’m serious—step away from the computer, turn off your phone, and go on a long walk. Or take a boxing class or a gentle yoga class. Whatever allows you to connect to your body and get out of your head will help. 
• Journal: Write down all the things that are going right in your life. Create a gratitude list. Remind yourself that you’ve been through hard things before, and that you can handle this. Or just rant about that frustrating client for a bit—whatever helps you feel better. 

➡️ Tip: Next time you hear a negative thought in your head, pause, take a breath, and ask, “Is this thought useful?” This takes the emotional charge out of the thought and allows you to view your situation more objectively. Learn more about this mindset hack in my free 5-day audio program, the Freelance Mindset Reset.

Step 3: Address the short-term crunch 💰

Okay, so now that you’re taking ownership and regulating your stress response, it’s time to actually solve the problem at hand. 

First things first: figure out exactly how much money you need to make ends meet this month. And when I say make ends meet, I mean just that—paying for your basic needs (housing, food, utilities) and any minimum payments on debt.

Once you have that number, brainstorm all the ways you could bring in cash quickly. Here are a few ideas to get you started:

• Offer a limited-time discount on your services: Reach out to previous clients and offer a special rate for a limited time—if they pay some or all upfront. This can help bring in quick work and cash flow. (Don't rely on a mass email here. Even though it's scary, this works best if you reach out to people directly and personally.)
• Sell some stuff: Chances are, you have some things lying around that you don’t need or use anymore. In the past, I've made $100 at Plato's Closet, just by selling a bunch or random stuff in my closet. That $100 helped me buy groceries that week!
• Pick up some odd jobs: There was a time when things got tough for me as a freelancer, so I started babysitting a few times a week. It was easy, paid well, and was even kind of fun. The best part? I could say no when I wasn't available, and pick up extra shifts when I needed the money.

Remember: The key to solving a short-term problem is to find a short-term solution. So DO consider babysitting, dog-walking, or selling a small project to a client at a deeply discounted rate. But DON'T lock yourself into a months-long contract where you'll be severely underpaid, just because you're currently desperate for work.

Should I find a part-time or full-time job?

If you are having an urgent cash flow problem, I want to remind you to focus on immediate solutions. I've met too many freelancers who have a cash flow issue and start spending all their energy on job applications...even though traditional hiring processes can take weeks at best, and months at worst.

You're actually more likely to solve an urgent cash flow problem through freelance work. Often, as a freelancer, you can close a new project and get paid by that client in a matter of DAYS. It's just more uncomfortable to reach out to clients and pitch yourself as a freelancer, which is why many people avoid it.

Looking for a new client? Join our free 5-day Momentum Challenge, kicking off LIVE on July 15 🤩 Secure your spot and start building momentum here!

Step 4: Commit to a long-term solution 💸

Once your immediate cash flow problem is under control, it’s time to think about how you can create more stability and consistency in your freelance business. Here are a few strategies that have helped me finally stabilize my income as a freelancer, earning $10,000+ every single month for the past year.

Monthly retainers 💼

When I got my first retainer client at $3,000 per month, it was life-changing. Suddenly, I knew I would get $3,000 at the start of every single month, allowing me to pay my rent and other essential bills without worry.

From there, my freelance business grew like wildfire—because I was no longer living in survival mode. That's the power of retainer work. It gives you the space to breathe so that you can build the business you truly want, without the pressure of having to close a new project or client every month, just to pay your bills.

Okay, okay, but I hear you—maybe you think that because you offer XYZ service, retainers won't work for you. I'd challenge you to get a little more creative. Many agencies and freelancers have built thriving businesses based on retainers—and I believe you can do the same.

I recommend starting with an existing client (since you already have a relationship and trust built with them) and pitching...

• A deliverable-based retainer, where you provide X deliverables (blogs, graphics, analytics reports) each month
• An hourly retainer, where they're guaranteed X hours of your time each month, to be used as needed (this worked really well for me as a copywriter, since clients' copywriting needs can change so much month-to-month)
• A maintenance or reporting retainer, where you provide ongoing support after a project is done (like a website maintenance retainer, but I also offer this for my SEO clients, and have seen other types of freelancers offer it too!)

💡 Tip: Remember that retainers only work if you're paid before the work is delivered. All my retainer clients pay on the 1st of the month. If they're more than 3 days late, I don't work. (And yes, this happened once, and that client never paid late again after seeing I was serious about my boundaries).

I also have 60-day cancellation clauses in my contracts so that even if they do cancel suddenly, I have time to replace them. 

Other long-term cash flow solutions 🚀

While retainers have been a game-changer for me, there are plenty of other long-term solutions you can explore to create more stability in your freelance business. Here are some ideas to get you started:

• Diversify your client base: Don't rely on one "big fish" to pay your bills each month. You don't always need the $10K/month client—you could benefit just as much from multiple $1,000/month clients or a mix of both.
• Build your network and referral system: Networking and building relationships with other freelancers can often lead to referrals for new projects and clients. Plus, having a solid referral system in place can bring in consistent work without much effort on your part.
• Keep pushing yourself: It's easy to get comfortable when you're making plenty of money, but you've got to find a way to stay motivated and keep selling—whether it's a financial goal like paying off debt, or a personal goal like taking a dream vacation.

Ultimately, the key to solving short-term crunches and creating long-term stability is taking ownership of your cash flow as a freelancer. By being proactive, staying organized, and exploring various solutions, you can weather any financial ups and downs that come your way.

Remember: You are not at the mercy of your clients or circumstances. You have the power to create and maintain a successful freelance business, no matter what happens. 🙏

There’s a better way to freelance 💙 

Freelancing can be lonely, overwhelming, and just plain hard. That’s why Freelance Unlocked, founded by me, Haley Davidson, is on a mission to make freelancing better.  

Learn more about our community and unlock freelancing resources below: 

• Join the Freelance Momentum Challenge ⚡️🏃‍♀️
• Listen to the Freelance Unlocked podcast 🎙️
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