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Monzo
Monzo is a digital bank that helps you manage your money, includes spending tracking, easy payment transfers and more.
Money. It makes the world go round and the management of it can be the difference between living a peaceful life or a stressful one – especially as a freelancer.
So I wanted to spend some time covering how I manage my money as a freelancer – which uses some mental models discussed in finance books like I Will Teach You to Be Rich by Ramit Sethi .
I’m by no means some financial expert and there will be people with much smarter, more complex systems than I.
But if your system or lack of isn’t serving you very well then what I’m about to cover will, hopefully at the very least spark some ideas.
To kick things off, it’s worth going over some of the tools that make up my money system:
Monzo is a digital bank that helps you manage your money, includes spending tracking, easy payment transfers and more.
Notion is an all-in-one workspace that allows you to organise, plan, collaborate, and get things done efficiently.
Penfold is a hassle-free pension provider that helps freelancers effortlessly manage and grow their retirement savings.
TaxScouts is a simplified tax return service that helps freelancers effortlessly complete and submit their taxes.
When I started freelancing, the first thing on my agenda was to create a business account with Monzo , there were a few reasons why:
Based on the above, here are the core pots I have in my business account:
If you’re interested in using Monzo for your business, the first 3 people can get £50 free when creating an account using my link below:
Notion handles more than just my finances – it’s the hub of my business.
But for this article, we’ll cover the parts of my money dashboard which:
As a freelancer, it can be hard to think about the future if you’re just trying to cover the essentials, but at some point, you’ll have to.
For a while, I didn’t save enough because my system didn’t account for my pension.
Since building it into my system though, I’ve set aside a portion of each invoice which goes straight to Penfold.
Again when choosing my pension provider ( Penfold ), I wanted to make sure that my money was being invested into companies with a more sustainable impact on the world.
By choosing a green pension plan you can cut your carbon footprint 21x more than going veggie, giving up flying and switching energy providers (for more info on this check Make My Money Matter ).
If you’re interested in using Penfold for your pension, you can get £25 free when creating an account using my link below:
Tax returns are one of the worst things about running your own business. So to help make the whole process a lot less painful I use TaxScouts .
Granted, you still need to keep track of your income/expenses but an accountant at TaxScouts will crunch the numbers and get everything ready for you to submit to HMRC – definitely worth the £149 if you ask me.
So if you hate completing your own tax return, I highly recommend checking out TaxScouts and if you use my link below you’ll get 10% off:
Now that we’ve covered the tools that make up my system, let’s get into the process of how they all come together.
I have a Money database in Notion where I keep track of all the invoices which I need to send out.
The database is organised to display each financial year and a breakdown of each month and the invoices for that month.
This then allows me to calculate my projected income for the month, quarter and financial year.
On my Notion dashboard, I have an inline view of my Money database filtered down to show the invoices that I need to send out for that month – along with the client name and amount, it also shows the status which is always Status: unpaid in this view.
When I’m ready to send out an invoice (either at the end of the month or at a project milestone), I’ll log in to QuickBooks and send off the invoice to my client.
Once that’s done, I’ll go back to my Notion dashboard and update that invoice status from Status: unpaid to Status: sent.
Once an invoice is marked as Status: sent in Notion, it’s then displayed in an inline view of the Money database called Awaiting payment.
This view will show ALL outstanding invoices no matter what month they were sent.
Once an invoice is paid, that money will then land in my Monzo business account.
At this point, I’ll update the status of the invoice to Status: Paid in Notion and mark it as paid in QuickBooks.
In tandem with step 5, once said invoice is paid, Monzo will automatically take out the specified percentage of that payment and move it directly to my tax pot – so I don‘t have to worry about it.
After step 5 (when an invoice is marked as Status: Paid), I’ve then set up an automation in Notion to set a Pension Status field to Status: Unpaid.
And just like before, on my Notion dashboard, I have an inline view of the Money database that shows all payments that have the Pension Status set to Status: Unpaid.
This view shows the client name, how much I need to pay from that invoice into my pension (a percentage of the payment) and the pension status.
I really wanted to automate all of this inside Monzo (like the tax pot) but it’s not possible with percentage amounts.
Based on my outstanding pension invoices inside of Notion. I’ll log into Monzo and either pay the money directly into Penfold or move it to my pension pot inside Monzo (if it’s a small amount which is moved over to Penfold once it’s a larger sum).
Once that’s done, I update the invoice Pension Status to Status: paid and then it disappears from my Notion dashboard as it’s completed the full cycle.
With what’s left of the payment, I then look to assign the money somewhere.
At the end of every month, I top up my Subscription pot and Coffee pot so I have enough to cover my subscriptions and coffee for the month ahead.
Once they’re topped up, I move the remaining money over to my Monzo joint account and further assign the money to different pots.
If it’s the end of the month we’ll top up our regular pots for Bills, Entertainment, Food etc. and once they’re all topped up, the rest of the money goes into our Emergency savings pot.
That’s largely it. Like with any system, it’s only good if it works with your workflow – so feel free to copy this exact setup if you wish or if anything seems useful to you incorporate it into your own setup.