Flexibility, variety, increased income potential—these are just a few of the reasons why you might be considering leaving your day job and going freelance. According to a 2020 Statista survey, the number of freelancers in the United States has increased from 53 million in 2014 to 59 million in 2020. Clearly the desire to start freelancing is on the rise—but what key questions should you consider before taking the leap to becoming a freelancer?
It’s important to take the time you need to answer that question for yourself. Consider the following pros and cons of freelancing to help you figure out if becoming a freelancer is the right path for you.
What is freelancing and how does it work?
Freelancers are self-employed consultants who provide services to individuals or companies of their choosing. Instead of reporting to a manager while working at a single company, freelancers don’t have managers; they have clients, and they can choose to work with as many clients as their schedules have the bandwidth for. Rather than receiving an annual salary, freelancers set their own rates. It’s common for freelancers to start part-time, building up client experience on the side while they keep their day jobs, before they take the leap to full-time freelance. Many freelancers even stay at part-time work, opting to work both freelance and a more stable job, indefinitely.
Some in-demand freelance consultant fields include: graphic design, copywriting, web development, search engine optimization (SEO), digital marketing, and photography. Most freelance roles include a mix of deliverables and appointments with clients. For example, you might produce concrete creations that you deliver to clients, such as building a website or writing copy for an ad campaign, and also spend your time on things like strategy calls or photoshoot appointments.
Determining if freelancing is right for you
If there’s one thing you’ve heard about freelancing before reading this article, it’s likely this:
You are your own boss.
And while that’s another one of the main draws of freelancing, being your own boss also comes with great responsibility. To embark on a successful freelance career, you need experience in your chosen field, and you also need to possess the skills to wear many different hats: project manager, accountant, and marketer—just to name a few.
So, is freelancing worth it for you at this point in your career, either part-time or full-time? Examining the types of skills, financial commitments, and time commitments that are required of freelancers could help guide you in the direction that makes the most sense for you.
Skill sets
Practical or technical experience
Consider how much practical experience you have in your field. A few years? Several? How much variety and depth of experience do you have in that field? For example, if you’re a social media marketing expert, do you have experience in managing organic posts, paid campaigns, or both? Are there certain channels that you’re more passionate about, or are you a multi-channel strategist? Considering your industry background and range can help you then research what sort of freelance demand is out there for what you could supply at this point in your career.
Emotional intelligence
Freelancers work with a wide variety of clients, who all have different personalities and work styles. Effectively navigating those relationships requires someone who’s self-aware about their own disposition and emotional intelligence. These are also often referred to as “soft skills”: clear communication, adaptability, self-motivation, time management, empathy—all skills that are crucial to a successful freelancer.
Financial concerns
Saving a safety net
If you’re planning to transition to freelance full-time, it’s best practice to make sure you have savings and/or a spouse’s salary to fall back on as a safety net. That safety net is meant to support you in case of lulls in client work or delayed client payments. The recommended size of your safety net varies based on the current state of the economy where you live, but a reasonable starting point is to save at least six months’ worth of expenses. For example, if you live in the United States and know you need at least $5,000 each month to cover your expenses and get by comfortably, then it would be wise to find a way to save at least $30,000 before freelancing full-time.
Health insurance
If you are planning to freelance full-time, make sure you have health insurance covered. If you have a spouse with a good insurance plan, you could potentially get covered through their plan. Otherwise, it’s important to research your options for the types of health insurance plans there are for self-employed individuals in your area.
Income Taxes
In the U.S., tax season only comes once a year—except for freelancers, when it comes four times a year. It’s best practice to file your income taxes quarterly as a freelancer, in order to avoid owing a massive sum in April. Whether you’re planning to freelance full-time or part-time, taxes on your freelance income won’t be automatically deducted from your paychecks like they would in a traditional job. Typically, freelancers should save at least 25% of their quarterly earnings to go toward paying their taxes.
Time commitment
Whether you choose to freelance part-time or full-time, you’ll need to consider the amount of time needed to commit to this style of work. In traditional jobs, usually your daily schedule is set by your employer, so you’re expected to organize the rest of your life around it. But as a freelancer, you have the power to organize your own schedule based on what you value most in life and work. It helps to take stock of your current priorities, so you know what’s most important to you in life, and then envision a freelance schedule that balances those priorities.
For example, you might have responsibilities as a parent or caretaker, limitations due to health conditions, or value having a certain amount of downtime. In any of those cases, as a freelancer you could estimate how much time you need for you and your loved ones, and then build your work schedule around that, instead of the other way around. Ultimately, freelance can be as much or as little of a time commitment as you want it to be, based on your rates, the types of projects you decide to pick up, and whether you choose to freelance part-time or full-time.
The pros and cons of freelancing
As with any career choice, freelancing has its pros and cons. Identifying if you feel the benefits outweigh the challenges—or not—is a key step along your journey toward deciding on if freelancing is the right career move for you, either right now or down the line.
Here are a few of the pros and cons of freelancing that are common across industries and locations.
Benefits of freelancing
Scheduling flexibility
According to a 2020 Statista survey, 71% of U.S. freelancers say that their leading reason for doing freelance work is to have more flexibility in their schedules. When you have the power to decide on the types of projects you want to work on, you also have the power to envision and enact the type of schedule you want to work around those projects. Only take calls in the morning to make space for heads-down work in the afternoons? Only want to work four days a week? Whether you want to work freelance part-time in addition to your day job, or you’re ready to go freelance full-time, it takes some trial and error to find the right balance with a schedule that meets your goals. But, ultimately, freelancing empowers you to create the schedule—and lifestyle—that you want for yourself.
Location flexibility
Many freelancers choose this lifestyle because it gives them the flexibility to work from wherever is best for their lifestyle. That typically includes creating a home office, but also means you can work from a variety of other locations: coffee shops, co-working spaces, parks, in transit from your phone, or even while traveling. If it has a WiFi signal, you might be able to do freelance work there.
Creative variety
Have you ever worked a job that’s just fine at first, but after a few months or years, you grow bored working on the same types of projects about the same limited set of problems? If so, freelance might help you discover more variety in your work life. Clients looking for freelancers have a wide variety of project types and lengths. You could work on one project for two weeks, another for two months, and another on an ongoing basis. Freelancers experience many feelings, but boredom typically isn’t one of them.
Increased earning potential
One of the big draws of freelance work is the ability to set your own pricing rates. Instead of working for a traditional set salary with the potential for only an annual increase or promotion, you can earn your own rates from multiple clients on your own terms. As you hone your skills and develop your reputation, you’ll also be empowered to raise your rates over time—there’s no ceiling to your income as a freelancer.
Challenges of freelancing
Unreliable workflow
Some benefits to freelancing can also be challenges. Seeking variety in the types of projects you take on can also sometimes lead to an imbalanced or unreliable workflow. For example, you could have some periods where you’ve landed several clients that overlap each other for a few months, but other periods where you’re unable to find many—or any—clients.
Inconsistent pay
Although setting your own rates means you have control over charging what your work is actually worth, working freelance does not include a consistent salary like you might be used to on other jobs. Instead of anticipating the same biweekly or weekly salary, freelance forces you to budget without a set salary, and advocate for yourself when clients are behind on payments.
No built-in health insurance
Since freelancers don’t get the benefits that a full-time employer might offer, going freelance means needing to purchase your own health insurance plan.
Managing your own income taxes
Instead of a traditional employer deducting the appropriate amount of taxes from your paychecks each pay period, you’ll be responsible for setting aside at least 25% of your income each time you get paid by freelance clients—and filing your taxes quarterly (if freelancing in the United States).
Should I start freelancing part-time?
Taking gradual steps toward building a freelance career by starting out part-time can help you confirm whether or not it’s right for you. Without the pressure of needing to save a safety net or support yourself entirely on freelance income, part-time freelance work is a lower financial risk, since you’d still have the steady income of your day job. Part-time freelancing can help you get a feel for the ins-and-outs of this type of work, and figure out if freelance is the right style for you—in life and work. It also helps you build your portfolio and learn as you go, which could benefit whichever career path you ultimately decide to pursue.
For example, after freelancing part-time for a few months, you could discover that the ideal situation for you is simply the occasional freelance project on top of your full-time job. On the other hand, it could help you discover that you’re on the right track, and help you start to save that safety net for you to eventually transition to full-time freelancing.
Whether you decide to freelance part-time or full-time, there’s still a number of considerations to take into account. First, make sure you define your niche and services in order to stand out from competitors in your field, and start paving a clear path forward on your new career journey.