Freelance horror stories are a dime a dozen.
From chasing six-month-old invoices to waking up to incredibly rude emails sent at 2 AM, almost every freelancer has at least one story of a gig gone wrong. As you become more secure as a freelancer, your “nightmare client” radar will also develop, but you still shouldn’t leave yourself vulnerable if you can help it.
Going freelance is incredibly empowering, and your best days at work as a self-employed person are likely to surpass any good day you had at your old office. You can have more good days than bad days by recognizing the differences between your position now and the security you had as a traditional employee, particularly when it comes to the legal and financial protections you once enjoyed.
Are you new to freelancing or about to scale your operations to take on more clients? We’re covering the ways you need to legally and financially protect yourself as a freelancer.
Among many new freelancers, there’s the temptation to do the work first to prove yourself and worry about the money aspect later. Money is always on your mind, but the first time you ask someone to pay you can be a little awkward, especially if you’re fresh out of a salaried position. You have to keep in mind that your finances are what allow you to freelance, not the other way around.
There are things you need to think about when you evaluate your finances as a freelancer. The first thing is thinking about your spending; you need to earn enough to cover your basic living costs and still pay your tax bill. As a self-employed person, you will pay more taxes than you did on the same salary as a W-2 employee unless you have a mountain of qualifying expenses. In addition, you’ll likely be required to pay your tax bill quarterly, which means you need to be prepared for four tax dates instead of one and budget accordingly.
There are plenty of guides that cover freelance finances and taxes, but one thing those guides don’t discuss is how to make the money needed to pay your bills. Getting a handle on your finances demands that you learn the rules of productivity because you don’t have time to waste. Following rules like sticking to a routine and leaving the house are important, but so is prioritizing value-added work and learning when and how to ask for better rates.
As you’ll soon learn, you can only cut costs so far. Learning how to ask for more money will get you much further as a freelancer than you know. Focus as much on your rates as you do on your budget, and do it early. It’s the only way to create balance in your finances.
We live in a time when freelancing is more common than ever. There will be 9.2 million Americans participating in the gig economy by 2021. While the growth in the number of freelancers and self-employed people has opened up new opportunities, it has also caused regulators to take a closer look at what’s happening under the surface.
On January 1, 2020, the state of California enacted a law that is predicted to decimate the state’s gig economy. It whittled down the number of companies allowed to rely on contractors and slashed the number of freelance jobs, mostly in areas where companies rely on freelancers for core operations. Some groups, including freelance writers, are somewhat exempt. Despite that, the bill sent a shockwave around America since California hosts some of the biggest employers in the U.S.
Other states already have laws on the books that detail the differences between a freelancer and an employee. The IRS also distinguishes between the two. According to the IRS, if you earn $75,000 a year as a freelancer and $60,000 comes from the same client, you might be considered an employee, whether you have a contract or not.
Getting to the bottom of your relationship with your clients will help you protect your freelance status when necessary. If your client insists on treating you as an employee without giving you the appropriate benefits, knowing the law can give you a better position to protect yourself.
Freelancing comes with a lot of benefits, but studies show that as many as 6 out of 10 freelancers feel lonely as a result of their working situation. Freelancer loneliness is almost inevitable at some point, and it’s something you need to know about before it happens. It shouldn’t steer you away from self-employment, but you should plan for it by going out of your way to stay connected.
Loneliness isn’t just a feeling. It can be dangerous to your physical and mental health, and it’s often a leading cause of stress. Loneliness can stop you from making money and wreak havoc on your finances.
Your method for combating loneliness needs to be as unique as you are. A few good ideas include ensuring to connect face-to-face with people when you can, focusing on maintaining your closest relationships, and looking for opportunities to collaborate when possible.
Networking opportunities can be a great resource for freelancers. They’re full of people who are in your position, so they understand your need for face-time, and in the process, you may even meet potential partners or prospective clients.
Protecting yourself as a freelancer is an ongoing process, but it’s something you need to start early. When you’re self-employed, little things can impact your paycheck in ways you won’t experience as an employee. By taking steps early, you can ensure you have more good days as a freelancer and make the bad days a little more bearable.