The Importance of Financial Planning As A Designer

Financial planning is an area that many freelancers and designers simply ignore. I'm not sure why, but that’s simply the way it is when they start their careers. I hear tons of stories of young designers who spend money like crazy in their first year or two. I actually know of someone who purchased a brand new, fully loaded Porsche Cayenne right out of school. Maybe it's the false sense of security that comes with a paycheck? Maybe it's because they have a sense of freedom? Maybe we feel like with this new experience need to come drastic lifestyle changes? Whatever the reason is, I can honestly say I was no different. Now I didn't go out and buy a Porsche, but I did fall in the same trap of not really planning and managing my finances very well early on in my career. Here's my story.

When I first started out in the industry, I was working for a really large agency and getting paid pretty well for a kid fresh out of college. I was young, had my whole life ahead of me, and it was just me and Julie at the time, with one dog. She was also working, at an advertising agency, so we were both doing pretty well. We were not Wall Street rich, but we had some disposable income. She was much more cautious about her spending, but I... not so much. I was flying blind with my money. Since all we really had to worry about were basic utilities and student loans, I spent lots of money. From expensive clothes to a few nice cars. For about four years, I really didn't have a gauge. I was just living without a budget and having fun as a young designer. It was a pretty strange time in my life, for sure. However, here's where things get really interesting for me.

When I first started freelancing and running Greenline, my habits didn't change from my days of working in a cushy agency. Sure, I knew I was not going to make as much money right away as I did as a full-time designer and maybe my excessive spending habits would have to change some, but the gauge I had for managing my income didn't. In those early days of Greenline, all I ever did was focus on making money. I took a project just because they'd pay me (or potentially pay me). I really put little emphasis on how that money could actually work for me or how it impacted me and my life in the long term. I just felt like the more projects I could win, the better. My strategy was to first pay for the short-term things me and Julie needed, like food, shelter, and utilities. Anything left over we saved for taxes, placed in savings or spent on fun stuff. Maybe you didn't or don't think this way. You may be wiser than me financially, and that's awesome!

So that was my first year or two as a freelancer. I call that time “the survival years”. However, in years three and four of Greenline, things began to pick up more for me, and then a shift happened. I started to see that I could make some decent money doing this. I figured that now was the time to begin "managing" my money. By managing, I meant I would just save every little bit of my disposable income, live more frugally, and deprive myself of everything that I ever wanted and enjoyed doing. This was the extreme opposite of before. I began to fear spending money and started to believe I was broke, even though I wasn’t. I was operating off of fear, and during that time Julie and I just continued to work. As our business grew, the risks and expenses became higher. Because we wanted a bigger safety net, we focussed on winning projects and working, and we rarely took vacations or time for ourselves. We worked nearly 7 days a week and pushed our contractors to the max. We were scared of slowing down because we didn't know if we really could or not. We had very little clarity into what our business was doing financially. We just knew we could pay ourselves and our bills.

Thinking back on it now, that was a grueling time for us. But that’s all we knew. Julie and I didn't come from wealth, and nobody in our families had built a business, so we had nobody to show us the ropes. We learned as we were going. Reflecting on those years and knowing what I know now, it’s clear that you need to have a clear financial plan for you and your business, or you'll wind up where we were – feeling like we were not in charge of our finances and obsessed with the sickening thought that we were living from client to client and paycheck to paycheck some months. I’m not ashamed of admitting that was our reality then,  because we still created great work and grew Greenline into something I could never have imagined. Still, it was a bumpy and emotional time for us. It forced us to make some HUGE changes in our careers, personal lives, and businesses during the last four years. I'm going to share some of them with you so that you too can begin to take control or stay in control of your finances. So here they are, in no particular order:

Have a Plan:

The biggest shift in how we manage our finances came when we discovered Dave Ramsey's book called The Total Money Makeover. He helped us build a personal plan that allows us to pay down massive debt. Along with that book we invested in an amazing product for Greenline, called Harpoon. Harpoon helps us set goals for our business and has amazing financial planning, time-tracking, billing, and budgeting features that are designed for freelancers, studios, and agencies. It allows us to really see what the health is for Greenline and if I really "need" to take on a new project or not based on my financial goals. It’s a great product, and I encourage you to check it out. I can say without a doubt that if I’d had this tool back at day 1, many of these struggles would have been eliminated.

Keep Life Simple:

Another thing that we’ve done throughout the years is focus on simplifying our life and de-cluttering so that we really know what we have and need. Sure, with being new parents some areas have become more complex, but in other areas it's really simple. We keep things pretty routine so that we don't go "wild" in one area or start a trend of buying a bunch of things that we don't need too impulsively. We've also taken Greenline from having a brick and mortar office in down-time Columbus and moved it back into our home with the use of remote team members and contractors. This has impacted our financial goals immensely and allows us to work on the projects that will profit us the most. The book Remote really convinced us this was possible.

Have a Budget for Everything:

I used to hate the word “budget”. To me, it meant that I was going to deprive myself from everything, but with the help of Mint and Dave Ramsey I've learned to understand the value of a budget. By having a budget we now end up paying ourselves first and taking care of those things we need to do, but then have room to do the things that we want to do – without buyer’s remorse or a fear of falling behind on our financial responsibilities.

Separate Personal Finances From Business Finances:

When you're starting out as a freelancer or becoming self-employed, it's really easy to blend your personal finances with your business's. We made the physical separation early on by having two separate bank accounts, one for our personal needs and one for my business needs. However, we didn't really make the mental leap. Now the reality is that our business has its own set of financial goals, and our personal life has its own too. That approach allows us to make the right decisions at the right time for each independently.

Do What's Best for You Financially:

What people think of you can be a great motivation, but if you constantly focus on making decisions based on what others think, it can lead to you feeling lost and moving without your own purpose in life. I've learned over the last few years that the goals and needs of Julie and I are not 100% the same as those of my peers. We all have our own lives and reasons for doing something. Don't let your own pride or the pressure of your peers keep you stuck doing something that's not helping you personally, professionally, or financially. When we decided to downsize Greenline's local footprint and eliminate the overhead of an office, so that we could focus on only delivering our best work and take on a wider client base that would strengthen us financially, it was hard to explain to clients and peers at first, but soon they saw the value.

Be Purposeful With Where You Spend Your Money:

The new me tries to be as purposeful as I can with what I buy. Using Mint's goals and budgeting, we can really see how a purchase affects our budget. To keep my spending in check, I ask myself on a scale of 1-10 how badly I really need an item before I buy it. If it's a business purchase, I try to base it on the strength of the return on investment for the business. Will it allow me to work faster? How long will it take to recoup the cost? By simply being aware of when you're excessively spending, you can easily put processes like the above in place, or even use a grocery list to slow down the “bleeding”.

Don't Be Afraid to Talk About Money:

Communication around money can be hard for some, but in order to really gain control of your finances, you have to be on the same page as your partners. Whether that's a business partner or a life partner. Julie and I communicate often about our finances. This was not the case five years ago. Five years ago, I really didn't want to talk much about money. She'd show me a few resources, and I'd dismiss them. Again, she was much better at this stuff than myself. Now we discuss money every month and review reports in both Mint and Harpoon to determine what each of us can do to improve our finances. Should we take on another project? Is a new project needed? Are we spending excessively in one area? How should we adjust to that? These are all discussions that you need to have regularly in order to reach your financial goals. You simply can’t get there without talking about it together.

Diversify Your Income:

Where's your income coming from? Is it all coming from one source? Maybe one client? One employer? If so, you may want to explore diversifying your income. Our industry can be somewhat unpredictable, and you don't want to be in a situation where you don't have an option if the industry takes a shift. I've been in companies that have had to lay off designers due to a shortage of work, I've worked for startups who had to close up due to lack of funding, etc. Unfortunately, early on with Greenline, we worked with clients who made up 80% of our income and often struggled to pay us. Nowadays we look at how diverse our client pool is and what our income sources are. Is it diverse enough? This is partially why I blog, consult, and maintain a few side-projects. By having diverse income streams, Julie and I only have to look at replacing the income from one area versus replacing an entire income stream if it begins to underproduce.  

Have People You Trust in Your Corner:

I've learned the last few years that I'm better served focussing on what I'm good at vs. trying to do the things that I'm not so good at. That pertains to finances as well. We've always had tax advisors and accountants for Greenline, but when it came to our personal finances, we just leveraged a few of our closest friends and family members for advice. The reality is that unless these people are financial advisors (in my case, they are not) or tax experts, they too only know so much about these industries and are probably not up to date on the latest techniques and strategies that pertain to our exact situation. That means we may be missing out on some key opportunities. In order for us to maximize our success in these areas, we've built a network of people that we trust to help handle this part of our life. We stay pretty involved and educated on the decisions that we make around our future, but it's been really nice knowing that we can bounce ideas around with people who are experts and also understand our goals and the future we are trying to build for ourselves.

Protect Yourself From the Storm:

Along with diversifying your income, you should also ensure that you are protected from those little moments or emergencies that come up in life. By incorporating an emergency fund, you'll feel a bit more at ease about those crazy and unexpected situations that can come up in life and in business. I know this has helped me and Julie a few times already in the last few years and has made it easier to weather a few storms.    


It goes without saying, but I'm NOT a financial advisor. I'm a designer, so you should not consider this post professional financial advice or a finance strategy. The above are just some tips that I’m now applying to take control over my finances as I'm getting older and growing in my career. It's an area that I feel many of us designers probably don't pay enough attention too because we are focussed on building a great portfolio and solutions for our clients and customers. My hope is that this post helps you place some attention on your own financial goals as you too continue to grow as a designer.

This may sound a bit cliche, but you can never start planning too soon for your future. If you have not implemented some sort of financial goals for yourself, you're missing out on the opportunity to really take advantage of an industry that is in demand and financially strong (all things considered). It's not a race by any means, and even with the tips above I have a LONG way to go before I feel like everything is financially where I'd like it to be, but because it's a slow and steady climb, you need to start small and start soon. As you continue to make progress, you'll start to build some wealth and momentum. That's when you'll really begin to find the joy in this process.

To help you get started on the right track and gain a better understanding of the financial health of your freelancing business, the great team at Harpoon is running an amazing Summer Sale! If you sign-up today, you'll get 50% off your first 3 months of Harpoon! Just use this promo code: "SUMMERSALE17"

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