In this digital age, freelancing is the way to go. It's a great way to earn money on your own time, giving you more flexibility with your day-to-day schedule. That said, taking the plunge is easier said than done, and it might take a bit of trial and error to make it a feasible option for you.
Perhaps the biggest concern that people have when it comes to freelancing is money. A consistent income stream is not guaranteed in this line of work, even when one establishes a regular client base, so it can be intimidating to commit to it fully. The good news is that most freelancers who stick with it do end up making it work—according to a report by Don't Do It Yourself, 65% of freelancers claim to be making more money working for themselves than for their previous company. Additionally, 31% of freelancers earn more than $75,000 a year, which is comparable to a lot of higher-range salaried jobs.
Of course, there are ways to prepare yourself before diving into a freelance setup. A good first step is making sure you have enough savings in your bank account to fall back on, just in case. The amount of business you receive may vary from month to month, so having that financial cushion can help offset that.
"I made sure to have around a year's worth of living costs on hand before leaving my salaried job and diving into freelance work," said Maurie Backman of The Motley Fool."I didn't have the biggest client base at that time, but having that much money in savings gave me the freedom to source quality clients with less stress."
Next, you should evaluate your budget to see where you can make changes to your spending habits. The freelance life may require you to make some compromises, especially at the beginning, so it would be best to evaluate what luxuries you can cut back on, even if just temporarily while you are establishing your footing.
Lastly, committing to a freelance setup would mean you would have to settle your health insurance on your own since you wouldn't have any employee benefits working for a company. Take the time to scout some affordable health insurance options so that you are still covered for important services. It will have to come out of your own pocket, but with proper budgeting, you won't even feel the payments being taken out of your bank account.
