Or at least make it less likely that you'll not go bankrupt and end up living on someone's couch.
Are you thinking about being a freelance writer or slowly making the switch from traditionally employed to self-employed? If you are, there are a few things you should do in order to ensure short and long-term financial viability.
1. Calculate Your Bills
The first step is to sit down and add up all your bills. These are things like rent or mortgage, car payment, electricity, gas, cable TV, Internet and any random subscription services.
Rent or Mortgage: $1,200
Car Payment: $450
Gas for House: $100
Gas for Car: $200
Car Insurance: $150
Cable and Internet: $150
Credit Cards: $200
Gym Membership: $45
Misc (Covers fluctuations): $200
2. Calculate Food and Essentials and Add Them to Your Monthly Bill Total
Misc (Toiler Paper, Soap, other stuff you can’t live without): $300
GRAND TOTAL: $3,795
The grand total is what you need to earn every month as a self-employed freelancer to live comfortably. Keep in mind that you’ll also need to budget for taxes. As a self-employed freelancer, no taxes will be taken out of your pay. That will be about 15 to20 percent of your earnings. In our example above, 20% for the year would be an additional $9,100. This means you will need to earn $54,640 per year or $4,553 per month, or $149 a day/365 days a year. If that sounds insane, you’d be correct. A beginning freelancer may only make an average of $10 to $25 a day, depending on what content mills they are working for and what private clients they have on their roster. Not to mention, freelancing work tends to be seasonal, which means there’s more work in the summer than in the winter.
3. Figure Out What You can Live Without and Cut It
It’s best to make all your bill cuts prior to becoming a fulltime freelance writer. You don’t want to find yourself sitting with $500 and a $1,200 mortgage due in three days. For this reason, you’ll need to cut your bills. I’d recommend getting rid of all subscription services, like Netflix, HULU, Amazon and anything else that’s nickel and diming you. You’ll probably also have to get rid of the gym membership. You'll also want to pay off your credit cards, but don't cancel them. You will need them. Harder things to change are the house payment and car. If at all possible, pay off the car before going into full-time freelancing. If you are in an expensive apartment, I recommend finding a cheaper one so that you can move once your lease is up.
The only things that are essential as a freelance writer is a roof over your head, electricity and Internet access and food. You’ll also want to maintain your cell phone. Everything else, you should consider as luxury. With any luck, you’ll be able to reduce your current bills by 25 to 50%, making sole-proprietorship more feasible.
4. Make Your Upgrades Now
If you need upgrades to your shoes, clothes, house repairs or anything else, make them prior to making the switch to a fulltime freelance writer. It may be years before you can do anything else. Remember, most startup businesses take 5 years before they are well established. This includes freelancing. For your sanity, start thinking that it’s going to be five years before you can buy any extras. This includes clothes and shoes, mattresses, TVs, ect. You just won’t have the money for it.
5. Remember that Your Budget is Backwards
As a traditionally employed individual, you are familiar with getting your paycheck and paying as many bills as you can minus the money you need for food, essentials and entertainment. As a freelancer, you do not have an automatic check coming to you for showing up and clocking in. You must earn every dime, and sometimes it really is a dime at a time or $10 at a time. This means that you need to stay on top of all the money you need for the month and earn it. Once you earn your bill money, you can start earning food money, and if you have any days left at the end of the month, you can earn extra money.
6. Keep in Mind the Order of Importance
Some months will be extremely tight. While you want to do your best to stay on top of your bills, you will encounter months where the money doesn’t add up. In this instance, you need to consider the order of importance. If you don’t have a roof over your head, you don’t need electricity or gas. If you don’t have Internet, you can’t work. So the primary items that become vitally important are your housing, Internet and electricity – more or less in that order.
If you can cut your bills and maintain a good workflow for most of the year, you’ll do all right as a freelancer. You won’t be rich, but you will be taking control of your life in every aspect.
Read More on Freelancing
- 4 Benefits of Using Dual Monitors While Writing and Freelancing ...
- Introductory Printers for Freelancing and Manuscript Printing That Will Meet Your Needs ...
- What should a Content Article Contain?
- What’s the Difference Between Custom Content and Content on Demand?
- How to Write a Content Article, Blog Post or Webpage with No Directions