Could you make more money by giving up your usual job for a freelance role?
- Sometimes a career change may be necessary to meet your income goals.
- Find out if this is a good idea for you and plan for the financial changes that come with the independent lifestyle.
- Freelancers must be motivated to work, and must also calculate their own taxes and deal with fluctuations in income.
For some people, changing jobs or industries can result in a higher salary. Some workers can also increase their income by moving from a traditional position to self-employment.
Although the freelance lifestyle isn’t for everyone, it can be a good option for motivated people who like to have more control over their workday.
I haven’t always been a full-time freelancer. I spent much of my twenties working in regular jobs.
These jobs had several things in common: they didn’t interest me, they didn’t pay well and they caused me a lot of stress. I ended up leaving the country to give myself time to work out my plan and pay off my debts.
While living and working abroad, I realized that I could not return home to the same depressing work environment that I had always known. So I started freelancing in my spare time.
I loved writing and it gave me hope that I could turn a part-time freelance job into a full-time job that paid all my bills.
I increased my income by becoming a freelance writer
Although the first two years as a freelancer weren’t easy (or stress-free), I’m happy to say that the change in work lifestyle ended up being a good decision for me. I continued to add new customers and increase my rates as I gained experience.
For me, my time and effort paid off. By the third year of full-time freelance work, I was earning more than triple the income I had earned in my pre-freelance work roles.
I was able to do that by taking on more writing projects that paid well. I could also control the amount of work I took on — so the earning potential was endless. Many traditional workers earn a fixed salary and are unable to generate more income beyond that.
Since I hadn’t made a lot of money in my previous positions, the increased income was good news for my bank account.
Is freelancing the right money move for your career?
The freelance life has given me more than just an increase in income. I could enjoy a more flexible schedule, I could choose the work I took on, and I didn’t dread my work day.
But it can be an adjustment from a traditional work environment to becoming a full-time freelancer. If you work best with consistent direction, regular work might be better.
As a freelancer, you are responsible for your every move, so you need to stay motivated and on track if you plan to make money.
Anyone who chooses to go freelance should be prepared for growing pains. It takes time to build up a clientele. Plus, you need to be comfortable being 100% responsible for your success. You not only have to do your job, but also be your own sales team.
If you’re considering quitting a regular job to become self-employed, it may be worth trying it part-time to see if you like it.
Three financial considerations to take into account as a freelancer
Although you can increase your income, the finances of freelancers can be very different.
Here are three financial considerations to consider before quitting a regular job on a regular salary:
1. Prepare for fluctuations in income
With a salaried job, you receive regular paychecks. As a freelancer, you may experience fluctuating earnings and payouts may not be as consistent.
If you take time off, you won’t get a paycheck, and when work is slower, you may earn less money than during busier times.
You can prepare for fluctuations in income by depositing into a savings account throughout the year.
2. Consider the cost of benefits
Freelance roles do not include benefits. If you need health care, want to contribute to a retirement account or other valuable benefits, you’ll have to pay for them yourself.
When determining the income you need to live a comfortable life, remember 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 deducted from their wages – so the hard work is already done.
As a freelancer, you will 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 are new to freelancing, it is recommended to work with a tax specialist. With guidance, you can make the best freelance tax moves.
Could you increase your income by becoming independent? It’s possible.
With more money in your wallet, you may be able to reach your personal financial goals faster.
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