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paying off credit card debt

Being a freelancer and paying off debt can be tough. It’s not fun owing money when your income is variable, you have no benefits, and uncertainty is looming around every corner. But I’m here to tell you that while all of those things are true, freelancing can actually help you pay off debt. 

Backstory 

I paid off $81,000 in student loans and I attribute my success to two things. One, I lived in Portland, Oregon, and shared a studio apartment with my partner at the time — so my cost of living was low (see $450 for rent). 

Two, I made the leap from a nonprofit employee making $31,000 to a full-time freelance writer and doubled my income to $60,000. Keeping my expenses low while doubling my income helped me have enough money to make large payments and finally overcome all of the principal and interest to ditch debt for good. Frugality came naturally to me and to be honest, there wasn’t much else to cut back on at that time. So earning more was what really set me on the path toward debt freedom. 

Freelancers actually have several unique advantages that can work in their favor and help them on their journey to pay off debt. Here’s why. 

You can set your own rates

As a freelancer, your time is valuable and limits what you can do. But theoretically, as a freelancer your income is limitless. Instead of having a flat income rate like a 9 to 5er, you have the power to set your rates and earn more. 

You can decide the minimum rate you’re willing to work for and add more to cover taxes, insurance, and retirement. I know pricing can be tough and starting to charge more when you’re a beginner or haven’t increased your rates in a while is scary. 

But my friend and fellow freelancer Eric Rosenberg told me something early on in my freelance writing career that was simple, effective, and invaluable.

“Keep asking for more until someone says no,” he said. 

If you’re paying off debt, make sure your rates are supporting your financial goals. You are a business owner after all and you need to support yourself as well as your own financial goals. You can increase your rates with current clients by giving them notice and saying, “After X date, my rates will be going up to $X. Please let me know if you have any questions or concerns. It’s been a pleasure working with you and I look forward to creating more with you.” 

You might be surprised that clients say “yes” more often than “no”. And if they don’t? You can negotiate and see if there is somewhere in the middle you can meet. 

Another strategy that may be easier is to charge new clients a higher rate. Of course, your skills, talent, and reputation have to back it up, but if it’s within industry standard, why not ask for more? As noted before, even a “no” gives you more room to negotiate lower but the bar is already set higher. For example, if you typically charge $70 per hour but then ask for $100 per hour, negotiating down to $80 or $90 per hour is still a net positive for you. 

It’s having this control over your rates and income possibility that is a gamechanger when paying off debt. 

Maximize tax perks 

Being a freelancer means you are likely a sole proprietor aka a business owner. That means you can take advantage of business deductions to lower your taxable income. Don’t spend more than you need to just because you can deduct business expenses, but you can be smart about your taxes. 

On top of that, you can invest in a SEP-IRA for retirement and save on taxes now. Your contributions to your future are tax-deductible now, which lowers your overall taxable income. That way you can pay Uncle Sam less and put more toward your future. 

As a freelancer, you can take advantage of these tax perks that employees typically can’t. So do what you can to maximize your money and enjoy tax benefits. 

You can take on one client just for paying off debt 

When I was paying off debt as a new freelancer, I had a client roster that paid my day-to-day bills. Many of these were “anchor clients” or clients that were repeat customers who paid roughly the same amount month to month. They are what I also call “bread and butter” clients aka the ones that pay my bills. 

Once that was set, I took on select new clients or one-off projects to meet my debt repayment goals. So for example, any extra projects or one specific client’s income would be used specifically toward my debt repayment. 

This strategy can be used for any financial goals, but for debt repayment, it’s good to know that your extra work and income will help lower the amount you owe.

As you work, imagine your balance going down.

It makes the extra work more fun and motivating. 

You can add new services 

One thing that freelancers can do is expand their services to help earn more. When I first started my business, I was making most of my income as a freelance writer. However, I also did some editing, social media scheduling, coaching, and speaking. 

It’s likely that you have additional skills that can be leveraged into more services that can help you boost your bottom line. Can you expand your services into a package? Get into coaching and help others get started? Break out into consulting? Offer other services that you do in your own business anyway? Adding new services can help you earn more, which can ultimately help you pay off debt. 

Bottom line 

It’s no secret that being a freelancer isn’t easy. You manage so much and the uncertainty and deadlines can be stressful. However, there is so much you can use to your advantage, especially when it comes to meeting your financial goals like debt repayment. 


Indy is here to help make your freelancing life easier and more efficient with tools that get you paid faster.

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