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#FreelanceFriday: Is Freelance Work Right for You?

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  • Tip Bones

The secret is out: freelance work has boomed in the last several years. Forbes reports that there could be as many as 57 million freelancers in the U.S. alone, and that number grows all the time. With so many platforms, short-term contracts, and gig opportunities, availability of freelance work has never been higher. Many have flocked to these opportunities, with the hope of making supplemental or primary income, and getting those oh-so-sweet open work hours.

Freelance work isn't even limited by industry. Writers, designers, musicians, artists, programmers, and even drivers all have work ready and waiting for the right person to take it up. Platforms like Upwork make it easy to search by category and find a gig without hardly breaking a sweat. Honestly, it can be tempting to quit the 9-to-5 grind in favor of freelance income.

So why doesn't everyone do it? Well, before you slap a resignation letter on your boss's desk, there are some things to consider. Freelancing may be alluring for the freedom to choose your projects and hours, but it's not without hazards.

1. No Health Insurance

A lot of traditional employers provide health insurance offers for regular employees. As your own boss, you're responsible for providing your own insurance, and that can get costly. While traditional employers often get big discounts on insurance, you probably won't, which means either big premiums or big deductibles.

2. Taxes

Not only are you responsible for your own benefits, but you have to account for taxes. If you were working at a regular job, your employer would take out social security and medicare taxes (at the minimum) from your paycheck. As your own boss, this is now your concern. Wondering how much to budget for taxes? A good rule of thumb is to budget 30% of your gross self employment income to taxes. You don't want to get caught off guard by a big tax bill in April!

3. No Vacation

As a freelancer, you need to be available all the time. That said, it becomes very difficult to take time off from work to recharge without losing revenue. If possible, try to find a way to schedule a task to complete automatically, like drafting social media posts for your business page ahead of time.

4. Competition

It's been suspected that the U.S. may well be on it's way to a 50% freelance economy. That means that there's far more competition for gigs than there once was, and it can be easy to price yourself out of the market. The best advice here is to flex your professionalism, and calculate your hourly rate, specifically, how much an hour of work costs you to complete, and price your work accordingly. It doesn't always pay to be the cheapest work available!

So, if you're the sort of worker who can make time for work every day, who knows how to price and market work, and can handle the extra costs of taxes, insurance, benefits, and retirement, then join the tens of millions in the gig economy! Be thoughtful, thorough, and professional, and one day, you may even be able to freelance full-time.