How a Freelance Designer in Peoria Does Money

Photo credit: Scott McLeod, CC BY 2.0.

Amy (not her real name) is a 30-year-old freelance designer in Peoria, Illinois.

So, Amy, how much are you making?

That’s a good question! My income varies so much. So far this year I’ve made $33K after taxes. But November and December should be big months for me in terms of invoicing, so hopefully $45K by the end of the year.

Nice! November and December are generally my smaller months, as publications go on holiday vacations.

Last year I had no work in December! It’s just the nature of the game, I guess.

For sure.

How do your earnings compare to your expenses? Where is your money going?

A large chunk of it goes to rent. I live with my fiancé and we pay $850/mo.

I pay $200/mo for health insurance, that’s another big expense.

I have a few other budget categories, mainly related to utilities, but we allow ourselves about $1,200 each for food and fun. Whatever is leftover we put into savings.

I should ask, since it’s been a topic of discussion on The Billfold lately: how many other budget categories? More than 40? Less than 10?

Just nine! I budget our fixed expenses like HBO, internet, gym membership. I don’t go back and analyze our credit card bill. I find that too stressful. I also want to give my parter the freedom to spend money on things that he feels are important without me analyzing them. I want that freedom as well, haha.

If I started seeing trends where our expenses were continuously higher than our income, I’d start looking a bit closer at our spending.

How do you keep your expenses below your income? Is it something you have to actively think about, or is it more like “our needs fit within our means?”

A little bit of both. I just started freelancing about a year ago and had no idea how much money I would make, if any. I wanted to make sure that we could live off just his income if we needed to, so I took his income and subtracted our fixed expenses. That gave us about $900 each ($1,800 total) to use on food, shopping, gifts, etc.

So we had to be pretty aware that we weren’t going to go over that number. I’ve upped it to $1,200 each now that I know I’m bringing in consistent money. It’s kind of like a marker where, if we start going over that, I know we need to reign it in.

That makes a lot of sense!

You also mentioned savings above: roughly how much are you putting into savings, and how is it divided up between emergency fund, retirement, etc.?

So far this year, of our combined incomes of $67,545, we’ve saved 32 percent or $21,533.

That’s very impressive!

We don’t divide it up really? It’s either sitting in a saving account or an investment account. At some point I should probably put a better plan in place about where it will go. Eventually we’ll buy a house, I think.

No IRA or retirement account?

Oh yeah, we will both fund our IRAs at the end of the year. He’s got a 401(k) which I don’t include in the savings number. I can put some in a tax-deferred retirement account made for freelancers I think, but I haven’t done a lot of research on that yet. Usually I just take a lump sum out of my savings to fund those account before I do my taxes.

Got it.

So let me ask you this: it sounds like you and your fiancé are really good at budgeting and financial planning. Do you feel… financially secure? Or do you still worry? (I mean, who DOESN’T worry, these days.)

Oh no, I worry about it all the time. We are very fortunate right now that we live in an area where cost of living is low, but I feel like that could change really easily. We will probably move to a bigger city within the next few years and our costs will definitely go up, and we’d like kids in the future and those cost money (so I hear). Neither of us have had any medical issues, but that could always change. So, although I know we are fine right now, I worry about having enough for the future.

Yeah, houses, kids, moving, all of that stuff costs money! Are you actively planning for any of that, beyond saving 32 percent of your income? Or are you more like “let’s get a big pile of money and then we’ll figure out how to spend it when we need to?”

Yeah, the second one, haha. It’s hard to say what our lives will be like in the next few years. Housing costs vary so much by city, and it depends on where we go next for our jobs.

For sure.

Have you always been a saver?

Yes, I mean, I had some years in college where things were on the thinner side. But I feel like my parents really drove into me the idea that you must live below your means. To a point it’s almost given me some unnecessary anxiety, haha.

Oh, I know the feeling. Especially during low cash-flow months.

Yes! Like this month we dumped $3,200 into car repairs. But what to do? We need the car. But I try to remind myself that’s what we save for, and that not every month can be a winner.


Is there anything you wish you did better, financially?

I feel like I should take some bigger risks. Since we’ve got savings, I wish I were more comfortable using them to buy a rental property, or start a business, or something like that. Right now I’m still too nervous to do anything with savings other than put it in a low-risk fund.

But I think maybe, once things are more settled, I’ll feel better doing that. I’ve moved around a lot the last few years so I feel like I have to be prepared for anything right now.

And you seem to be!

With that in mind, last question: what advice do you have for Billfold readers?

Something my dad told me the other day when I was complaining about paying that monster car repair bill. He says “sometimes you just have to accept it, pay it, and then forget about it as soon as you can.” Although that’s a bit of a privileged thought, assuming someone has the money to pay something that large, I thought it was good advice. Like, bills are always going to happen, and you just have to learn to enjoy life despite that.

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.