- Sometimes a career move may be necessary to reach your income goals.
- Find out if this is a good idea for you and plan for the financial changes that come with the freelance lifestyle.
- Freelancers have to be self-motivated to work, and also need to calculate their own taxes and cope with income fluctuations.
Could you make more money by ditching your regular job for a freelance role?
For some people, switching jobs or industries can result in a bigger paycheck. Another way that some workers can grow their income is by changing from a traditional job role to freelance.
While the freelance lifestyle isn't for everyone, it can be a good option for self-motivated people who like to have more control over their work day.
I haven't always been a full-time freelancer. I spent much of my twenties working regular jobs.
These jobs had several things in common -- they didn't interest me, didn't pay well, and caused me a lot of stress. I ended up moving out of the country to give myself time to sort out my plan and pay off debt.
While living and working abroad, I realized I couldn't come back home to the same soul-sucking work environment that I always knew. So, I started freelance writing in my free time.
I enjoyed writing, and it gave me hope that I could turn a part-time freelance gig into a full-time job that paid all of my bills.
I boosted my income by becoming a freelance writer
While the first couple of years as a freelancer weren't easy (or without stress), I'm happy to say that the work lifestyle change ended up being a good move for me. I continued to add new clients and increase my rates as I gained experience.
For me, my time and effort paid off. By year three of full-time freelancing, I was making more than triple the income I had made in my pre-freelancing work roles.
I was able to do this by taking on more writing projects that paid well. I could also control how much work I took on -- so the income potential was infinite. Many traditional workers make a set salary and are unable to bring in more income beyond that.
Since I hadn't made much money in my previous job roles, the boost in income was welcome news for my bank account.
Is freelancing the right money move for your career?
Freelance life offered me more than just an income boost. I could enjoy a more flexible schedule, got to choose what work I took on, and didn't dread my work day.
But it can be an adjustment going from a traditional work environment to becoming a full-time freelancer. If you work best with constant direction, a regular job might be best.
As a freelance worker, you're responsible for your every move, so you must keep yourself motivated and on track if you plan to make money.
Anyone who chooses to switch to freelance should prepare for growing pains. It takes time to build a client base. Plus, you must get comfortable being 100% responsible for your success. You not only have to do your work, but you also have to be your own sales team.
If you're thinking of leaving a regular job to freelance, it can be beneficial to try it out part-time to see if you like it.
Three financial considerations to make as a freelancer
Even if you can boost your income, freelance finances can be very different.
Here are three financial considerations to make before leaving a regular job with a steady paycheck:
1. Prepare for income fluctuations
With a salaried job, you receive paychecks regularly. As a freelancer, you may experience income fluctuations, and payments may not be as consistent.
If you take time off, you won't have a paycheck coming in, and when work is slower, you may make less money than you do at busier times.
You can prepare income fluctuations by contribution to a savings account throughout the year.
2. Consider the cost of benefits
Freelance roles don't include benefits. If you need healthcare, want to contribute to a retirement account, or other valuable perks -- you'll need to pay for those on your own.
As you figure out how much income you need to make to live a comfortable life, don't forget to calculate the cost of these benefits.
3. Don't ignore freelance taxes
Finally, freelancers are responsible for setting aside and paying their taxes. Traditional workers have their taxes taken out of their paychecks -- so the hard work is already done.
As a freelancer, you'll need to calculate your tax liability and save for your taxes throughout the year. Making quarterly payments is the best way to avoid penalties and fees.
If you're new to freelancing, working with a tax professional is recommended. With guidance, you can make the best freelance tax moves.
Could you boost your income by becoming a freelancer? It's possible.
With more money in your wallet, you may be able to reach your personal finance goals sooner.
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