Freelancers know this as the age of the Gig Economy. It’s not uncommon to see people walking out into the streets, tired of working for the man, and starting off fresh. I’m no stranger to this myself, as I was one of the many who decided that I could use my skills to start a business. I’ve talked to other freelancers about how their gigs are going. A friend of mine drives for Lyft and once told me that he makes over $400 a day driving people to and from the airport! It’s people like him that are all in, and I love seeing my fellow freelancers excel at selling their services.
Being a freelancer comes with its own set of pros and cons. Among the pros of being a freelancer include being your own boss, setting your own hours, and picking who you want to work with. The cons are that there are no guarantees. It takes a while to build up a report and the work isn’t always consistent. I do this full-time and know how stressful it can be when you’re in a freelance drought. All that means is being more aggressive when finding work. You never know, things could pick up again towards the end of the month.
Worried about quitting your job to starting your business? Then I have a lot of secret tips on how you can manage your income working freelance jobs. Keep reading to see how to survive in today’s Gig Economy.
Define your income
All I can think of is Dr. Evil lifting his pink and saying, “One million dollars!” That may be achievable later down the road. For now, I suggest shooting for the average income that Nation 1099’s 2018 survey reported. They found that full-time freelancers who have three to ten years experience can make an average income of $70,536. Not bad, yes? Keep this number in mind as you continue going through the process of how to consistently make money while working freelance jobs.
Devise a plan to make that income
All right! Here’s where the real work begins. I can’t stress this enough, whatever you do, don’t sell yourself short. I made this mistake when starting out and found out the hard way that this isn’t the way to make it in the Gig Economy. I worked a lot of small gigs that paid hardly anything. I found myself burnout, frustrated, and stressed. I almost gave up and started to get my resume ready for job hunting. Take it from me, set your rate and the amount of time for projects you need to complete each day, week, or month in order to make you set yearly income. Freelancers who start out that way, are those that are the most successful.
So where to begin? I suggest finding a platform that tailors to your services. A good way to start out working freelance jobs is on a site like UpWork or Fiverr. That's where I got this gig. Once you have reviews and referrals, create a website and go off the grid. That’s a great way to get people to come to you organically. You’ll find that you’ll no longer run into the issue of haggling with clients to get them to pay you your rate. I see this all the time! Freelancers who work hard will get people to pay the price they ask. You just have to get in front of that audience and leverage your value to them.
Create a budget
Want that trip to Hawaii? Don’t we all! Now more than ever do you have to be diligent about a budget when working freelance jobs. What you made this month, won’t be the same as next month. Mint.com says to take into account food, utilities, phone, internet service, and transportation. This sounds kind of obvious but failing to do so can have you freaking out by the end of the month. When I felt a bit light on cash when working freelance jobs, I had it all planned out on how to accommodate for falling short of my income goal.
When you hop on board and work in the Gig Economy, prepare to no longer have access to benefits like health insurance. It’s a pain, I know. Like many, I take medicine and there was no way I would be able to pay for it without access to health insurance. Under the Affordable Care Act, freelancers can find health insurance as either an individual or as a company.
Prepare your taxes
Ugh! Taxes, am I right? I don’t mean to bring it up, but taxes work differently when you work freelance jobs. Your income doesn’t include taxes that would be deducted from an employee’s monthly paycheck. To make up for those wages not taxed, you’ll have to pay the Self-Employment Tax. This means you’ll pay both the employer and employee side of taxes. Confusing? I’m right there with you! Like many others, TurboTax sees the growth of the Gig Economy and has a well-lined out guide to help you prepare for the dreaded April deadline each year. Keep this information in mind when setting off on your freelance adventure.
Plan for your future
A mistake that many make, freelancer or not, is not putting enough money aside for retirement. You’ll want enough money to give you options. In addition to plan out the who, what, when, and where you want to run your business, you get to do the same with how you divvy out that income. Go ahead and enjoy a vacation of your choice. But I can’t stress it enough how important it is to save for the unexpected.
How you can manage your income
Working a freelance job puts you in the executive chair. Making money is great, but not managing it can ruin your newly built sole proprietorship. As a freelancer, you’ll experience lulls so it is best to know how to prepare for that. The best advice I can give is to enjoy being your own boss. You’ve earned it!