TL;DR
In today's session, we take a deep and honest look at one of freelancing's least discussed but most critical challenges: surviving the Feast and Famine Cycle.
We'll explore why freelancing income feels unstable even when you are successful, how to restructure your thinking about money from a monthly salary mindset to a business-owner mindset, why saving aggressively is essential especially for freelancers in countries like Pakistan, how to manage your cash flow better by paying yourself a salary, and when it's actually the right time to think about investments.
This workshop article draws directly from real-world freelancing struggles, making it an essential read for anyone who wants to thrive long-term without burning out.
Introduction: Migration to Substack and a Quick Update
Before we began today's article, a quick announcement: as next phase of our migration, the career resources are now being migrated over to Substack. Find them all here: https://sknexus.substack.com/t/resources
Freelancing's Most Persistent Problem: Feast and Famine Cycles
Today’s core topic centers around something every freelancer eventually faces: the Feast and Famine Cycle.
This issue appears particularly once a freelancer has achieved semi-success but hasn’t yet built systems to stabilize their earnings.
The problem begins with the transition from salaried jobs to freelancing. In jobs, most people are conditioned to expect a paycheck at regular intervals. Salary lands in your account like clockwork every month, typically on the first. Bills follow soon after, and then you are left to budget your life with a known, predictable amount.
In freelancing, there is no such rhythm. Some months are overstuffed with clients and projects, enough that you may not even have time to sleep properly. Money flows in abundance. Then, without warning, two or three months could pass without a single new project, without a new client inquiry, without meaningful income. This dramatic swing from overflowing work to complete drought is what defines the Feast and Famine Cycle.
For many, this instability is more stressful than the absolute amount of money they make. The lack of predictability, the sudden anxiety of not knowing when the next paycheck is coming, creates enormous emotional turbulence. It's not enough to succeed in freelancing - you have to learn how to survive success too.
Why Freelance Income Is So Different from Salary Income
One of the first things freelancers must grasp is that the monthly mindset no longer applies.
In a job, a 30-day income cycle conditions your entire life. In freelancing, no such guaranteed monthly cycle exists. Income is uneven. You might earn heavily one month and nothing the next two.
Instead of asking yourself, "How much did I make this month?", you must begin thinking like a business owner: "What is my average revenue across a year?"
For example, if across the span of one year you earn Rs. 12 lakh, that roughly averages out to Rs. 1 lakh per month. However, the distribution of that income could be wildly uneven - earning Rs. 6 lakh from one big project, Rs. 4 lakh from another, and Rs. 2 lakh from miscellaneous smaller projects.
The monthly breakdown is irrelevant.
The focus must remain on the yearly average.
Freelancing means managing chaos. It demands that you develop the mental discipline to measure your financial life in long arcs of 6–12 months, not 30 days.
The Hidden Delays in Freelance Payments
One major factor that complicates freelancing finances even further is the hidden delay between completing work and receiving payment.
Most freelance platforms like Upwork are built with delays baked in. For example, hourly projects often release payments after 14 days, while fixed-price projects clear after about 9 days.
But it doesn’t end there. Once money is released, it still needs to be transferred to your preferred service like Payoneer or Wise, taking an additional 1–2 days. From there, it must move into your local bank account - a process that itself might take 3–5 days, depending on the bank and circumstances.
In practical terms, it can easily take two to three weeks between finishing a project and having access to your earnings. This is another reason why freelancing demands cash flow planning. You cannot assume that money is immediately available once a project is finished.
Treating Yourself Like a Business
Given all these uncertainties, freelancing is best approached by adopting a business mindset.
You must divide your finances into two separate streams:
Revenue Account (Bank Account 1): All income from clients flows here.
Personal Salary Account (Bank Account 2): You pay yourself a fixed, predictable salary from your business account.
Suppose you complete a project and earn Rs. 5 lakh. Instead of treating this like an immediate windfall to splurge, you transfer the full amount to your Revenue Account. Then, every month, you pay yourself a fixed salary - say, Rs. 1 lakh - out of that revenue.
This strategy ensures two things: stability and discipline.
You smooth out the feast and famine cycles by creating your own "salary system" even though your projects and clients operate on their own unpredictable schedules. You also avoid falling into the dangerous pattern of lifestyle inflation, where expenses balloon simply because income temporarily spikes.
Avoiding the Trap of Sudden Wealth Syndrome
A common and very visible mistake many freelancers make is succumbing to sudden wealth syndrome.
As soon as they start earning in dollars, many freelancers rush to buy luxury gadgets - iPhones, MacBooks, large-screen TVs, gaming consoles. The rush of new money creates an illusion that good times will last forever.
But when the famine cycle inevitably arrives, they are left selling those same luxuries on OLX just to cover bills.
Freelancers must understand: it’s not about how much you make - it’s about how consistently you manage it.
That’s why maintaining a disciplined salary and expense ratio is critical to survival.
Rethinking Conventional Financial Advice: Why 50-30-20 Doesn't Work Here
Freelancers in countries like Pakistan must be especially careful when following Western financial advice such as the 50-30-20 rule (50% for needs, 30% for wants, 20% for savings).
The problem is that these models are designed for economies like the US, where both needs (like rent) and goods (like laptops, phones) are proportionally expensive.
In Pakistan, basic needs are much cheaper - but goods are priced closer to global standards. As a result, if you only save 20% of your income, after years of saving, you might barely afford a Suzuki Swift - and by then inflation will have pushed prices even higher.
Thus, a more appropriate framework is:
25% Needs, 25% Wants, 50% Savings.
Maximizing savings is not optional. It's the only way to build a financial cushion in an economy prone to currency devaluation and inflationary pressure.
The Golden Saving Goal: Six Months of Expenses
Beyond percentages, every freelancer must internalize a hard financial goal:
Save at least six months’ worth of living expenses.
If your total monthly expenses are Rs. 50,000, then your target savings should be Rs. 300,000 at a minimum.
This six-month cushion acts as your emergency fund. It gives you breathing room to survive:
Account freezes
Platform bans
Unexpected illnesses
Internet shutdowns
Market downturns
Six months is typically enough time to recover from a setback and rebuild your freelancing momentum. Without it, even a small hiccup can turn into a full-blown crisis.
Understanding the Ceiling of Freelance Income
It's important to also be realistic about how high freelancing income can climb.
For solo freelancers (not agencies, not teams), the average ceiling even on platforms like Upwork is around $40–$50 per hour after years of experience and specialization.
Assuming you work 10–12 hours per day, you might earn between $400–$600 per working day, or about $8,000–$12,000 per month. However, this is the exception, not the rule. Less than 5% of freelancers ever reach this level.
Most established freelancers stabilize around $3,000–$4,000 per month, and reaching even this point typically takes 2–3 years of consistent work and specialization.
Thus, one must manage ambitions with reality. Growth happens, but it happens gradually- and requires both patience and systems.
Should You Think About Investments?
A lot of freelancers begin thinking about investments as soon as they earn a few thousand dollars. However, freelancing income is fundamentally unstable.
Before you invest in stocks, real estate, or any financial instruments, your first priority must be:
Achieve a consistent $3k–$4k monthly income.
Build a full six-month emergency fund.
Only after achieving these two milestones should you even consider traditional investments. Until then, the best investment you can make is investing in yourself - better sales skills, stronger portfolios, better marketing techniques.
Conclusion: Building Stability from Chaos
The Feast and Famine Cycle will always exist in freelancing. But by shifting your mindset from employee to business owner, treating yourself with financial discipline, saving aggressively, and focusing on long-term averages rather than short-term highs, you can thrive within this chaos rather than being crushed by it.
Remember:
Freelancing is a business, not a paycheck.
You must create your own salary structure.
Savings are your true insurance against volatility.
Real freedom comes from financial discipline, not income spikes.
By mastering these fundamental truths, you give yourself the best chance not just to survive freelancing - but to truly flourish within it.
If you found this session valuable, feel free to join our Discord server for live Q&As, discussions, and more deep-dive workshops. You can also comment below to share your thoughts or ask questions!
Note: The above article is generated based on the Workshop Video. Some inconsistencies may be present due to the process of manual edit. For the most accurate info, refer to the video.
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