I got hit with a $10,000 tax bill this year, but my 3-prong money management strategy meant it wasn't a problem

I didn't panic, though, because I'd planned ahead for my taxes as part of my three-prong money management strategy that covers taxes, retirement savings, and just about everything else.
Whenever I get paid by a client for freelance work, I immediately set aside 30% in a high-yield business savings account for taxes, another 10% in a retirement savings account, and the remainder stays in my business checking account to pay business expenses, give myself a salary, and anything else.
Using multiple accounts helps me keep the money separate and ready for any surprise bills like the latest one from the IRS.
See Business Insider's picks for the best high-yield savings accounts

I've made a lot of financial mistakes in my personal life . Luckily, I sorted most of these out by the time I started my freelance business. I use budgeting software (You Need a Budget, to be specific) to budget for my business just like I do for my personal finances, and it's been a lifesaver in more ways than one.

Take, for instance, when I got hit with a surprise IRS bill for $10,034 after doing my tax return this year . That sucks. But, I already had far more than that saved in my tax savings account, so I'll be able to pay it with no problem and still have money left over to top off my other retirement accounts and pay off the last bit of my student loans.

All too often I hear other freelancers lament not being able to pay surprise tax bills, and not having enough retirement savings. It doesn't have to be that way.

All you need is a simple system, a budgeting program, and the discipline to spend a couple of minutes sorting out your income as you get paid. Trust me, if I the most scatterbrained of people can do it, so can you. Here's what I do.

Tax savings: Set aside 30% in a high-interest savings account

Unfortunately, like all things in life, the government gets its due first.

If you had an employer, they'd take a cut of your paycheck before you get paid. Now, you're your own employer, so let's make sure you do the same thing.

I log into my high-yield business bank account at least every few days. Develop a schedule for yourself; once a day, once a week, etc Mark it on the calendar until it becomes a habit, or use an app like Todoist (also handy for planning your day as a business owner).

If I see that I've gotten any new client payments, I tally them all up to get the total amount. Then, I multiply it by 0.30 to shave off 30%. This amount gets transferred into a separate savings account that I've set up just for tax savings.

When I have to pay my quarterly taxes, I transfer the required amount back into my checking account so it's ready to go.

By the end of the year, I've usually saved up quite a surplus beyond what I've paid out in taxes. I do this deliberately because I never want to get caught with a tax bill I can't pay. Thus, I save a bigger percentage than I think I'll owe in taxes. This is where having an accountant estimate a good savings rate can really come in handy.

Retirement savings: Set aside 10% in a retirement account

As fun as freelancing can be, I don't want to do it forever. Someday I'd like to retire.

That's why I also set aside 10% of each paycheck for retirement. I note the amount just like with my tax savings, and once a month, I deposit the monthly total into my Vanguard SEP IRA.

You can deposit an even larger slice if you want, but since I have an odd business structure as an LLC partnership with my husband, I'm limited to that amount with my SEP IRA. You can also opt for another self-employed retirement account , like a SIMPLE IRA or a Solo 401(k).

My paycheck: Set aside 60%

What's left over in my checking account is for me. Now that I know I have my present tax obligations and my future needs taken care of, I'm comfortable paying out the rest to myself.

In truth, I get slightly less than 60%, because I also use this chunk of money for my monthly business expenses, including transcription fees, my Skype subscription, and accounting fees. I also save up for other expenses, like attending conferences or annual subscriptions.

However, as a freelance writer, my overhead isn't much. After I budget out for these items each month, the remainder gets lumped into a "Distributions to ME!" category, and at the end of the month, I deposit it into my and my husband's personal account as my paycheck.

I'll revise my percentages for next year

For most of my five-year freelance writing career, this system has worked pretty well. I've always had a surplus in my tax savings account by the end of the year, and so I treat it as a bonus.

This year was a little different. Since my husband recently graduated and moved into the working world, our combined income was higher and we forgot to adjust accordingly. Thus, I was faced with every freelancer's worst nightmare: a surprise tax bill of $10,034.

No sweat, though. Thanks to my system and over-saving for my taxes, I had more than enough in my tax savings account to pay the rogue tax bill, and then some. I still got to pay myself my "bonus," and I didn't need to worry about going into debt again.

At the same time, I also faced another problem: I over-contributed to my SEP IRA. It also wasn't a big deal since I only had to withdraw the extra money plus the earnings, but it was a hassle and a few extra hours of work to figure out.

However, I'd still prefer not to have that high tax bill next year, and not have to worry about fixing an over-contribution to my SEP IRA. So, I'm adjusting how I divvy up my paycheck.

Rather than a 10/30/60, retirement/taxes/distributions system, I'm going to save more for taxes and less for retirement. I'll split things up 7/33/60. That way, if I haven't contributed the maximum to my SEP IRA by the end of next year, I can more easily top it off than take it out.

It's still a work in progress, but it's the best system I've found to ease my financial anxiety and make sure I have all my bases covered. It only takes a few minutes to run through this routine each week, and the results are well worth it.

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I got hit with a $10,000 tax bill this year, but my 3-prong money management strategy meant it wasn't a problem

Tax savings: Set aside 30% in a high-interest savings account

Retirement savings: Set aside 10% in a retirement account

My paycheck: Set aside 60%

I'll revise my percentages for next year

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