It is estimated that a full one-third of the workforce in the U.S. work on a freelance basis. The “gig economy” as it is called, employs 30.2 million independent workers in the U.S. and hundreds of millions more around the world. A number of talented professionals today are skipping the traditional 9-to-5 desk jobs for the freedom offered to them by freelancing and self-employment.
Freelancers don’t need to abide by the formality of small or medium-sized businesses, but that doesn’t mean that they can do absolutely anything with their time and money.
Freelancers need to build a safety net and have some sort of structure in the way they work. They must work with a sense of purpose, especially when it comes to how they spend their time.
Here are the 4 Essential Tips for a Happy and Fulfilling Career as a Freelancer…
Tip #1: Automate your financial and tax payments
When you work for a large company, your finances are handled for you. So you don’t have to worry about tax withdrawals for the state or the IRS, this is taken care of by the company automatically. Similarly, you don’t have to worry about paying for your insurance, personal loans or credit card debt – the whole process is automated and the payments are deducted from your salary.
Of course, as a freelancer, you won’t get a regular salary. What you can do is to set up a dedicated savings account and make arrangements with your bank to withdraw 20% of every paycheck from a client or a freelance site such as Upwork.com or Guru.com into it. You can then allow for automated tax deductions, payments for insurance and retirement savings to be made from this account. This saves you time and the headache of making sure that all the payments are made on time.
Tip #2: Keep your business and personal finances separate
It is very important that there shouldn’t be an overlap between your personal finances and business. It is much easier to manage your business as a freelancer when you have a dedicated business checking account. You should consider setting up an LLC (Limited Liability Company) or a corporation for your business, which would protect and separate your personal finances from the business.
This way, you will not be personally responsible for a business liability, such as not being able to pay a business loan on time. This offers a measure of protection to your personal assets, otherwise if you operate your business as a sole proprietorship, there’s no distinction between the business and your personal finances. You should never take on such a risk.
Tip #3: Don’t work too hard
A big mistake made by freelancers, especially when they get started is to accept every project they get, even at the cost of the other important things in their life. There’s no point taking on so much work that it would cause you to miss your daughter’s soccer practice.
Some freelancers work 14 to 16 hours a day, which means they are tied to their desk for much of their waking hours, hunched over a laptop and have no time for physical exercise. Ignoring your health can have serious consequences, especially with the rising cost of health care in most countries around the world.
So relax, learn to say “no” to some projects that would take up a lot of your time, and make sure to get at least 30 to 45 minutes of exercise every day. There’s no point in making a six-figure income if that is at the cost of your health.
Tip #4: Look to learn new things all the time
As a freelancer, you must keep learning all the time. Don’t get complacent and don’t get into a rut where you keep doing the same thing again and again. Your skills will stagnate over time and a few years from now you will realize, much to your shock that they are not needed anymore by anyone. Look to learn something new and take on fresh challenges. Find a mentor who is willing to show you the ropes. Keep learning, keep discovering new things and keep growing. That’s the secret to having a fulfilling career as a freelancer.