4 Things to Consider Before Taking the Freelance Plunge

So you want to become a freelancer.

You’re not alone. A 2018 study from the Federal Reserve found that 30 percent of US adults engaged in some kind of gig work in the month before the survey, including freelance work. A study from the Mercatus Center at George Mason University found that the number of 1099s (the form used to claim freelance and other miscellaneous income) filed with the IRS rose 22 percent since 2000.

Whether you want a side gig or you’ve had it with conventional employment, freelancing might be right for you. Here’s how to decide.

Question One: Can I Afford It?

The first and most vital question to ask before becoming a full- or part-time freelancer is Can I afford to do so?

Here’s a quick way to do the math:

  1. Calculate the total amount of money you need to sustain yourself and any dependents at the standard of living you deem essential for your comfort, per year. Include everything you can think of: housing, transportation, utilities, food, medical costs, educational expenses, retirement funding, various types of insurance, clothing, toys, computers and phones, subscriptions, replacing furniture and household goods, haircuts, vacations, HOA fees, and so on.
  2. Add 10 percent to the above number for each person this income will support.
  3. Double this total.

This number is the minimum amount you will need to make as a freelancer each year.

“But wait!” you may say. “My current job doesn’t pay this much! How on Earth could I need to make so much more as a freelancer to maintain my current standard of living?”

The answer is that your take-home pay isn’t the total amount of your compensation from a conventional employer. Your compensation includes things like workers’ comp insurance, half your Social Security and Medicare taxes, federal and state tax withholdings, and so on. If you’re employed full-time, it also includes the costs of things like health insurance and (possibly) a retirement plan.

Your employer also pays for things like your desk, chair and work computer – things you’ll be buying if you’re a freelancer.

As a freelancer, however, you’re both the employer and employee. Which means you’re on the hook for all the costs.

The other reason this number needs to be so high is that freelance pay is unreliable. You’ll do work, but you won’t receive the pay for six months or more. You’ll spend uncompensated time chasing down deadbeats who accepted your work and then skipped out on the bill. You’ll have months with no paycheck at all and months where half the money you make all year all comes in the door at once.

Which brings us to the next question….

Question Two: How’s My Personal Discipline?

Can you put yourself on a strict budget and stick to it, even when faced with the temptation not to do that?

Can you pretend that half or more of the money in your bank account doesn’t even exist?

Can you make yourself get up at the same time each morning and work efficiently, even when you’d rather do literally anything else?

Can you make yourself step away from your desk when the work is done, even though you could do just one more thing because you really need the money….?

If the answer to these questions isn’t “Yes, because I already do that,” you’re not ready to freelance full-time.

If the answer is “I think so, but I haven’t tried it,” then freelancing in your spare time offers a way to test your own self-discipline and determine whether you’re ready to take the leap into full-time freelance work.

All successful freelancers have one trait in common: They succeed because they exercise self-discipline.

As your own boss, you don’t have anyone requiring you to do certain jobs at certain times. You have to make sure the work gets done well, on deadline, and within budget – no matter how many other exciting events surround you.

Question Three: Can I Express Confidence in Myself and My Work?

One of the most common Terrible Freelance Questions I see on Quora is “how much should I charge as a beginning freelancer?”

This question is terrible because it indicates that the freelancer in question doesn’t trust their own skills. They think of their work as “beginner” work. They’ve put training wheels on their confidence and merging onto a superhighway.

Every freelancer was once a beginner. But to move from beginner to long-term pro, you must have the confidence to stand behind your work and its value.

This means:

  • Researching market rates for your work and pricing according to the value and complexity of the project, not your own skill set.
  • Standing up for yourself when clients complain, try to “revise” a piece to an entirely new project, or drag their feet on pay.
  • Saying “no” to projects that don’t adequately compensate you for the time and effort you’ll spend on them.

These are not easy things to do. The freelance world is, unfortunately, full of predatory clients who will do their best to get free work from you, whether that means offering to pay in exposure, demanding “on spec” work, or simply ghosting you as soon as your invoice arrives.

But the freelance world has its fair share of good clients, too. You can maximize your time with the good ones and spot the bad ones early, if you have the confidence to assert your own value.

Question Four: Does Constantly Changing My Skill Set Sound Fun, Or Horrible?

The entire work world is moving faster than ever. Current research estimates that our work skills become obsolete every ten years. If you’re in tech or any tech-adjacent field, your skills become obsolete every four years.

Freelancers’ skill sets become obsolete on the same timeline – or even faster, given that freelancers often spearhead new systems and processes that later become adopted by conventional employers.

In other words, expect that you won’t be doing the same kind or quality of freelance work in five years that you’re doing today, nor will you be doing it in the same way.

People tend to have one of two reactions to the news that they’re going to need a whole new skill set every five years. Either they’re dismayed, or they’re excited.

If you’re in the latter category, freelancing might be the right choice for you. If your primary complaint about conventional employment is that you don’t get to learn new things or try new projects fast enough, freelancing is almost certainly going to suit you more than a regular day job.

If you like predictability and being told what to do, however, you’ll definitely prefer regular employment to freelancing.

Next Steps

If you’ve decided to give freelancing a shot, the next thing to do is to decide what types of work you want to do, as well as to set up certain systems like your budget and workspace. See my guide on how to make a living as a freelance writer for more details, and do plenty of research on your own.


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