Freelancing is one of those things that tend to polarize people. Some consider it their dream career and will jump in no matter what, while others are convinced they’ll never make as much as a full-time corporate job.
There are many benefits of freelance work but it’s important to weigh them up and decide if this way of working is right for you.
Freedom
As a freelancer, you’re your own boss. You decide what projects you want to take on and when, and you’re free to work with clients that align with your own values. You can also set your own rates, which allows you to earn more money than if you worked for an employer.
Unlike salaried employees, freelancers pay their own income taxes. This means you need to keep track of your expenses and savings in order to ensure you’re meeting your financial obligations. However, some people find the extra responsibility rewarding.
Another downside of freelancing is that you don’t get employee benefits like health insurance, 401k access, or pension plans. This may be a concern if you’re used to the stability of a full-time job. However, there are many affordable options available for freelancers who need to secure these benefits. You can even set up a business account to separate your personal and professional finances. This makes it easier to claim expenses and work out your profit at the end of the year.
Flexibility
One of the main benefits that comes with freelancing is the flexibility to choose your workload and clients. You can accept more work if you need extra income, or turn down clients that don’t meet your standards or payment terms. Unlike salaried employees, you also have the freedom to quit your job without losing any of your earned wages or benefits.
Typically, freelancers are responsible for paying their own taxes and business expenses. This includes withholdings for social security and Medicare, as well as finding their own health insurance and setting up retirement savings plans like a Solo 401(k) or SEP-IRA.
This often means that you’ll have to resolve any issues with clients on your own, which can be exhausting. However, Mukti finds that freelancers tend to help each other by referring clients they trust to others and working together in coworking spaces. This creates a sense of community and can protect against the stress that can come with non-payment, financially crazy months, or difficult clients.
Earning Potential
One of the biggest perks that comes with freelancing is that you’ll make more than you would in many traditional jobs. This is especially true if you start to establish yourself as an expert in your field.
However, it’s important to remember that you’ll also have to pay self-employment taxes, and you may not be eligible for employer benefits like a company car or health insurance. If this is a big concern for you, consider consulting with an accountant about how to maximize your earning potential as a freelancer.
Another thing to keep in mind is that freelancers often have to deal with clients who are late or don’t pay at all. This can be challenging, but it is possible to work around it by setting up an invoicing system, establishing nonpayment penalties in your contracts, and even suing clients in small claims court if necessary. It’s worth remembering that your financial safety net will only be as strong as the quality of your clients and the way you manage your relationships with them.
Work-Life Balance
One of the most significant benefits of freelance work is having more time for other things in life. For instance, you can cut back on commuting time and save on fuel costs. Moreover, working from home also allows you to spend more time with family and friends.
Another way that freelancing gives you more work-life balance is by allowing you to choose your own clients. This means you can avoid the toxicity of office politics and bad management that sometimes comes with full-time jobs.
However, working for yourself also means that you have to keep track of all the business expenses you incur and maintain your own health insurance. This can be challenging and requires a lot of self-discipline.
Additionally, many people worry that freelancing is a feast or famine situation, meaning you will either have too much work or not enough. This can be true for new freelancers, but it is also possible to manage the finances of a freelance career well with careful planning and constant sourcing of new projects.
