How I manage my money as a freelancer using Monzo & Notion

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.

Monzo

When I started freelancing, the first thing on my agenda was to create a business account with  Monzo, there were a few reasons why:

1. Pots – I wanted an easy way to assign a job to my money and avoid having any money sitting in my checking account (a common strategy covered in finance books)
2. Tax pot – with a business account you get a tax pot, so every time you get paid, a percentage is automatically moved to this pot (which offers peace of mind come tax season)
3. Green – unlike many of the popular high street banks, Monzo isn’t actively funding the fossil fuel industry (for more info on this check  bank.green)

Based on the above, here are the core pots I have in my business account:

• Tax – a percentage of each payment is automatically taken out for taxes
• Subscriptions – this uses a virtual card under the hood, so I can pay for my subscriptions directly from here and not have to worry if someone manages to steal my card details
• Pension – build up smaller sums of money to be moved into Penfold
• Coffee – a set amount stashed away for coffee shop visits throughout the month

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

 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:

• Tracks upcoming payments
• Tracks outstanding payments
• Tracks outstanding pension payments
• In the future – automatically track expenses from Monzo to Notion using  Zapier (stay tuned)

Penfold

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:

TaxScouts

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:

Process

Now that we’ve covered the tools that make up my system, let’s get into the process of how they all come together.

1. Money database (Notion)

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.

2. Upcoming invoices (Notion)

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.

3. Sending invoices (QuickBooks & Notion)

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.

4. Awaiting payment (Notion)

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.

5. Receiving payment (Monzo, Notion & QuickBooks)

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.

6. Tax money (Monzo)

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.

7. Pension reminder (Notion)

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.

8. Topping up my pension pot (Monzo & Penfold)

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.

9. Assigning a job to my remaining money (Monzo)

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.