X
Popular Searches

8 Things to Know Before You Start a Freelance Job

A young man working on his laptop in a dining room.
Josep Suria/Shutterstock

About one-third of U.S. workers are freelancers. Are you ready to join them on the freelance train? There are a few things you should know first.

If you start freelancing, it doesn’t mean you have to quit your day job. It can be a way to supplement your income or invest in your passions without leaving your steady job. However, once you start a freelancing business, it tends to grow. If your client list expands, you might start thinking about going full-time.

Whether you’re just looking for a side gig or hoping to be your own boss permanently, these tips will help you find success and avoid the pitfalls of freelancing.

There’s no need to reinvent the entrepreneurial wheel—learn from those who’ve gone before you instead.

Your Budget Will Be Tighter

Freelancers don’t necessarily make less money than people in traditional jobs. However, because of the way freelance income works, they often live on tighter budgets for most of the year.

In a traditional job, you know how much money to expect in each paycheck, and when each one will arrive. Freelancing can be much less predictable. Your income might depend on which clients you have at a given moment, and how much work those clients have available. You might also face more unexpected expenses—when your laptop breaks, you’re the only one who can replace it.

Due to these factors, freelancers tend to be more careful about recreational spending. Instead of going to a restaurant for dinner or making an impulsive Amazon purchase, it’s wise to put that money in a savings account instead. This way, if you run into a dry spell or an unexpected expense, you’re always prepared.

Living on a tighter budget doesn’t always mean a lower quality of life. However, it does mean you can no longer spend money as frivolously as you might have before.

You Can Get Insurance

The insurance page on the Freelancers Union website.
Freelancers Union

Many people worry if they walk away from a traditional employer, they won’t have the safety net of insurance. However, there are many insurance options available for full-time freelancers.

Of course, as most people are aware, you can buy health insurance through the Affordable Care Act, but you can also get life, disability, accident, and other types of insurance, too. The Freelancers Union is a great resource to learn about your options.

Keep in mind, though, the price and quality of these insurance programs might be very different from what you get through your employer, so do careful research before you leave your job.

Marketing and Development

As a freelancer, your job won’t just involve completing the tasks you accept from clients. You’ll also spend a significant amount of time marketing yourself and developing your skills, so you stay at the top of your game.

Successful freelancers are always thinking about where they can find new clients. They also have backup plans in case a project falls through. They take online classes, design clever business cards, and build a strong online following to better market themselves.

The type of marketing and development you’ll need depends on your industry and goals. Although you don’t get paid for it directly, marketing is a critical part of your job as a freelancer.

Your Connections Matter

As a freelancer, networking isn’t just a buzzword; it’s a crucial way to find new clients and stay abreast of industry changes.

However, networking doesn’t mean just attending designated events. It can also involve talking to other freelancers at your favorite cafe or telling people at a party a little about what you do. It doesn’t matter where you do it, as long as you make those connections.

Forge friendships and working relationships with people who can bring you new opportunities. Your friends at conventional jobs won’t always understand the unique frustrations freelancers face, but your fellow freelancers will.

You’re Not Limited to One-offs

Freelancing doesn’t always mean working on a single project for each client. Because freelancers have become a more integral part of the workforce, many companies now hire them for ongoing projects.

If you have a handful of clients that offer long-term work, freelancing is much easier because you’re not always searching for that next project. Luckily, those types of clients are quickly becoming more common.

You’ll Pay More Taxes

When you’re self-employed, you have to pay taxes as both an employer and employee. This means nearly one-third of your income might go to taxes. Definitely brush up on estimated quarterly taxes, as you’re likely unfamiliar with these if you’ve always been a W-2 employee prior to freelancing.

As a freelancer, it’s usually wise to set aside at least 30 percent of your annual income for taxes. If your tax bill is lower than expected, the extra funds can serve as a valuable savings account.

Use Contracts

Freelancers have to be comfortable sending a contract to any client who doesn’t provide one. Contracts ensure everyone is on the same page, and it gives you something to refer back to if there are any miscommunications.

You can find simple contract templates online for just about any type of project. Make sure you and your client agree on all the terms of the contract before you move forward.

It’s Okay to Fail

Freelancing often sounds like a dream job. You’re your own boss, you set your own schedule, and you choose the projects you want to work on. The truth is, though, it’s not for everyone.

If you give full-time freelancing a try and realize you miss the structure of a regular job, that’s okay! There’s no shame in going back to a regular schedule after spending some time as a freelancer. Any experience you get freelancing will teach you valuable lessons that can help you in a traditional job, too.

You’ll never know what it’s like until you try it, but hopefully, these tips will help you prepare for your first project. For more about what you can expect from the freelance life, check out these common work-from-home myths.

Elyse Hauser Elyse Hauser
Elyse Hauser is a Seattle-based writer and editor with a Master's in Writing Studies from Saint Joseph's University. Her work has appeared in publications like Racked, Vine Leaves Literary Journal, and Rum Punch Press. She was awarded a 2017 Writing Between the Vines residency.  Read Full Bio »

The above article may contain affiliate links, which help support LifeSavvy.


LifeSavvy is where you learn new skills for a better life. Whether you’re looking for tips on organization, travel, parenting, fitness, relationships, school, or your career, our team of expert writers is here to help. Want to know more?