Freelancing has become much more popular in recent years. With the rise of remote jobs after the pandemic, more options than ever exist to work from home. If you’re thinking about making the leap, check out the pros and cons of freelancing to determine if it’s the right career move for you.
What is freelancing?
People can have different definitions of freelancing, depending on their careers. Most commonly, it means that someone makes an income without an employer. They might work from their home or rent an office space if they’re successful enough to afford one.
Freelancing can also mean you don’t have to work 40 hours weekly. That doesn’t always work for everyone, so you may need a career with flexible hours and workdays. The flexibility is one of the many benefits of freelancing that make people want to leave traditional employment behind.
Which careers include freelancers?
When you imagine freelancers, what do you picture them doing for work? People might imagine writers working from a coffee shop or photographers taking photos at a wedding. Although those are viable career options, many other lines of work can happen from home.
You could consider working as a:
- Graphic designer
- Social media specialist
- IT support specialist
Think about your existing skill set and consider how you would enjoy spending your time. Switching to a new career to start freelancing could be in your best interest if your current job doesn’t feel fulfilling.
What are the pros of freelancing?
While comparing different career options, you might wonder — what are the pros of freelancing? These are the most significant benefits people enjoy after becoming independent professionals.
1. You can pick your schedule
Most people are drawn to freelancing because you can pick a schedule that works best for you. You could schedule paid gigs around a full-time job, family commitments, or your school schedule. Finding freelancing jobs that pay a full-time wage without requiring you to work in an office is also possible.
List your most significant priorities and determine how much time you need for them each week. It’s also helpful to think about your future. What would you prefer to spend your time doing? You can set a work schedule around that list and live the life you want, but only if you gain more control over your schedule as a freelancer.
2. You can avoid toxic workplace environments
Some workplaces lack enough empathy to foster a positive environment. Toxic atmospheres fueled by passive-aggressive comments, looks, and emails deteriorate your mental health. Freelancers get to remove themselves from that kind of workplace and never worry about experiencing that again.
Freelancing requires skilled communication. Anyone who can effectively communicate will know how to listen, leading to more empathetic leaders and co-workers in remote workspaces. Empathy is another factor that keeps toxicity far away from anyone who works from home.
3. You’ll work with diverse clients
Companies typically decide who they’ll work with based on what the business owner, board members, or shareholders prefer. Freelancers can pick a diverse range of clients that align with their commitment to diversity.
Independent contractors can work with whoever they want, especially if their work centers around underserved communities that would otherwise get ignored by big businesses.
You may also define professional diversity as opportunities to work for companies globally. You’ll gain more experience and a broader perspective, making you a more valuable asset in your field.
4. You’ll gain more free time
Traditional employees need to arrive at their office every day at the same time. Factor rush hour traffic into that drive, and you’ll spend much more time on the road than you might prefer. Given that the average commute is over 27 minutes long, you could gain an hour of free time or more by working remotely as a freelancer.
You could use that time to do fun things with your family, pick up new hobbies, or volunteer with local organizations. You’d have time to exercise and reduce your brain fog during stressful periods after transitioning from traditional employment to freelancing. You’ll get to do whatever you want when you don’t have to commute anymore.
5. You can set your pay rate
Managers have to set employee pay rates based on factors like national averages and local pay trends for the same job. Freelancers get to set their rates, which may help you make more money than you stood to gain with an employer.
Think about how much experience you have in your field. Have you spent over a decade in leadership positions or just started your professional life? Determine your pay rate by researching the value of your skills and comparing freelancing prices for others who do similar work. You can adjust your fees anytime because you won’t have to wait for an annual review.
6. You can work multiple jobs
Some people feel unfulfilled in traditional jobs because they don’t have a singular passion. You might want to use your skills to help people and contribute to the world in numerous ways. Freelancing allows people to do that because they can work in multiple fields simultaneously.
You may want to tutor college students on the weekends, then take family photos during the week. While at home, you could work with clients to set up websites that help their businesses. It depends on your interests and how much practice you have at time management.
7. You can work anywhere
Working from your couch might seem great at first, but remember that freelancers can work elsewhere too. Many drive to coffee shops, libraries, and college campuses when they want a change of scenery. You could even go on vacation and work from the beach for a week if your job is entirely remote.
8. You’ll gain potential tax deductions
Freelancers who work from home can claim tax deductions that aren’t available to traditional employees. You could deduct costs from your electric bill, rent, Wi-Fi bill, and any purchases made for work purposes. Even filling up at the gas tank could take money off your annual tax bill if you’re driving for work. Talk with a tax expert to get the specifics regarding your career or new remote routine.
What are the cons of freelancing?
Sometimes people don’t prefer freelance jobs for various reasons. Consider these factors when deciding what to do with your career.
1. You’ll pay more in taxes
What are the cons of freelancing? When independent contractors answer this question, they often mention their taxes first.
Find an accountant who’s well-versed in self-employment taxes and deductions to make the financial transition easier. They’ll help you calculate what you should pay quarterly to federal and state governments before your annual tax filing appointment.
You’ll need to cover the 15.3% federal tax to take care of your Social Security and Medicare deductions. Traditional employees only pay half that amount because their employer covers the other half. You’ll also have to pay your state’s income tax and a personal income tax.
This part of freelancing gets more challenging if your income fluctuates due to the gig economy or if you start a struggling business. Meet with your accountant regularly to ensure that you’re paying the correct amount in quarterly taxes based on your income and any relevant deductions.
2. It’s easier to waste time at home
While working at home, there isn’t a supervisor or boss looking over your shoulder. You can be on your phone as much as you want or clock in at a different time each day. It’s much easier to waste time when you’re not in an office setting, but it’s not an impossible challenge to overcome.
You can figure out how you spend your time using a time tracking system. The most popular programs will log how you spend each minute and present records at the end of each day or week. You’ll know exactly what you were doing with your time during your less productive moments and watch for those distractions in the future. It’s an excellent way to monitor your current time usage to see if you can handle working remotely or make your freelancing job easier.
3. Work isn’t always steady
If you don’t sign a contract to work a specific number of hours with a company, you’ll have to find your next assignments to continue making an income. This may be more challenging for people who are new to freelancing or just starting a freelance business. You might find work easily one month and struggle the next. It depends on what you decide to do with your career.
4. Sometimes people don’t pay
Before and after completing a job, freelancers must collect deposits and final payments from their clients. Sometimes people don’t pay because they think they didn’t get their desired results or assume the freelancer won’t take them to court over the missed payment.
This may not happen frequently, but you’ll eventually encounter it as a freelancer. Establishing an invoicing system, imposing nonpayment penalties in your contract, and suing them in small claims court are all steps you may need to take. Your accountant may also be able to write your nonpayment off as a loss on your annual taxes if all else fails.
5. Working from home can be isolating
Do you consider yourself a social butterfly? If you look forward to chatting with co-workers and hanging out with them on your lunch break, you may find freelancing too isolating. Working from home can be lonely, even if you regularly meet with clients.
Some people don’t realize that self-employment is too isolating for them until after they’ve made the leap. Consider how much you rely on social interactions at your workplace to determine if you would thrive at home or would need to plan more time with friends to make a freelancing career work.
6. Meeting friends is more challenging
If you’ve just moved to a new location and don’t have many friends, freelancing could make it harder to form great relationships. You won’t meet people at your workplace, so expanding your friend group will be more challenging.
Research clubs in your city related to your hobbies and interests. If you can meet friends in other settings, leaving the traditional workplace won’t have the same effect on your social life.
7. You won’t have an IT team
Many businesses have in-house IT experts ready to help with computer or phone issues. They save the day if your website goes down or a computer freezes, but not if you work from home as a freelancer.
Freelancers typically work for themselves and not a company. You’ll give up your access to an IT team after making your big career switch. This may be a dealbreaker for people who don’t know how to solve their computer problems at home since your work will rely on your phone and internet access.
8. You won’t get employee benefits
Receiving full benefits is one of the most significant perks of traditional employment. Your employer may pay half or more than half of the cost for essential benefits like:
- Healthcare plans
- Dental insurance
- Vision insurance
When people leave their employers, they give up those benefits. Instead, you’ll have to find them independently through the healthcare marketplace and pay full price for monthly premiums.
Freelancers also don’t get 401k accounts or contribution matches when starting their careers because there isn’t an employer to provide those things. You’ll need to learn how to live without paid time off (PTO) and sick leave as well.
Some people rely on these benefits to maintain their quality of life or the health of their loved ones. Switching to a freelancing career may not be worth it if you need top-tier benefits to cover things like costly medications, dental services, or your upcoming retirement.
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Everyone should seriously think about the many pros and cons of freelancing before making any career changes. Consider what makes you happy or disgruntled about your current employment situation to determine if working independently is your best move. You’ll make the right decision after giving yourself time to weigh your options.
And if you’ve decided to make the jump to freelancing, you can use productivity tools to make the freelancing life much easier. Indy is a productivity platform that gives you everything you need to take charge of your freelance business. You can land new clients with Indy’s Proposals, Contracts, and Forms tools. Keep track of working hours and manage projects with our Time Tracker and Tasks tools. Then get paid fast with Indy’s Invoices. Check out how Indy can simplify freelancing for you.