There are numerous benefits to being a freelancer -- such as the ability to make your own rules, set your own schedule, and enjoy the freedom of getting to choose what you work on. At the same time, going from a steady paycheck to a variable one could wreak havoc on your finances, as you can suddenly finding yourself on the hook for self-employment taxes. If you're thinking of hopping aboard the freelance train, be sure to learn something from the following moves my colleagues and I made when we took the same leap.

I set quotas

Daniel B. Kline: As a full-time freelancer, you control your own income. If you don't do the work, you don't get paid. There's no sick time, paid vacation, or any of the other things people get when they have a full-time job.

Man on a roof deck using a laptop


In addition, full-time freelancers have near-endless freedom. That's one of the major perks, but it's also a potential risk. In recent weeks, for example, I have twice taken full days off to spend time with friends at the major theme parks that are a few hours from my door. I also had a school vacation week where I took afternoons off to spend with my son.

In order to do that and still be able to make the income I'm aiming for, I hold myself to a rigid quota of how many stories I will write on a daily, weekly, and monthly basis. It's fine to be off on a daily goal, but I try to make sure I hit my weekly quota, and I most certainly will do whatever is needed to make my monthly number.

Doing this requires some planning. Sometimes I work weekends, nights, or early mornings. In general, I try to front-load my schedule so if something comes up that I want or need to do, I'm already ahead of the game. I also never pass up an opportunity to do a little extra work, not just to make more money, but so I can then have the option of taking off if a cool opportunity comes up.

I set up a 401(k) 

Jason Hall: One of the first things I did when I left my job to become a full-time contractor was to open an individual 401(k). I had both a rollover traditional IRA and a Roth, but since my wife's employer offers her a retirement plan, I knew I wouldn't be able to deduct any contributions to my traditional IRA from our income taxes. For this reason, and the fact you can contribute substantially more to a 401(k) than an IRA each year, it was a no-brainer. 

Sure, I don't get the matching contributions I got when I was permanently employed, so I have to contribute more of my own money each year to reach my retirement savings goals. But I also have far more control over how my retirement savings are invested, and I actually spend less on fees than with my old corporate 401(k) plan. Not every online broker offers an individual 401(k), and you'll want to shop around to find one that's low-cost and offers the same capabilities as their other account types. 

But the bottom line: Do not put this off. Open a retirement account and start funding it today. The longer you wait, the harder it will be to catch up, and the more you'll fall behind.

I boosted my emergency fund

Maurie Backman: We're all told we're supposed to have enough emergency savings to cover three to six months' worth of living expenses. Before I went freelance, I was actually at the six-month mark, but as I started working independently, I made a point to keep building that emergency fund so I'd have more protection from the unknown.

The scary thing about being a freelancer is that you never know when your work might just plain dry up. Over the past number of years, I've had periods where I was working every night until midnight and times when I could barely manage to squeeze out 10 hours of work per week. That emergency fund of mine is a security blanket of sorts -- I know that it's there for me when I need it and that I can tap it if I encounter a period of lower income coupled with higher expenses.

Even if you aren't a freelancer, it pays to have emergency savings on hand because you never know when you might lose your job or get hit with a series of unplanned bills. But when you don't have that steady paycheck to look forward to, it really becomes all the more crucial.