By Rhonda Campbell
Technology is giving people more work options, namely whether to work full-time for an employer or freelance. Gone are the days when workers have no choice except to commute to a job and log seven or more hours a day, often performing work that they hate. More work options are also creating situations that never amounts to more than an illusion of independence for many people. If you’re not careful, you could regret the next decision you make — quitting your employer-funded gig before you’re ready.
Freelance and you get to take control of your work schedule, adjust your salary throughout the year, complete assignments for clients you like and work across industries. You also could end up taking on projects that expand far beyond what you’d initially agreed to. But, secure off-site work and you could fall in love with the idea of getting paid for work you complete (drum roll) while you’re dressed in an old, comfortable pair of sweats or your favorite pajamas.
On the other hand, a traditional job allows you to grow into a regular work schedule. Unless you work for commissions, you’ll be paid for every hour that you work. That means, you won’t have to worry about a pesky client who keeps asking you to take on additional tasks before she considers the deliverables of the contract you signed with her three months ago to be completed.
Are you ready to start a freelance job?
If the idea of giving up your traditional job and starting a freelancing job has been popping up in your mind more frequently, read over the below advantages and disadvantages associated with both types of employment.
- Many traditional jobs are at-will, meaning that you or the employer could sever the working relationship for any reason at any time. Nearly all freelance jobs are at-will. Lose a freelance gig and you won’t get severance pay or unemployment.
- A daily commute is often a part of a traditional job, some employers requiring you to not only commute 30+ minutes one way Monday through Friday, but also requiring you to travel out-of-state. As a freelancer, unless you work for a client on-site or attend trade events, etc., there’s a good chance that can complete work for a dozen or more clients right from home.
- Living on a freelancer’s income is similar to riding a rollercoaster, weekly and monthly money you earn going up and down, sometimes significantly (Do not take this one lightly or even with a medium amount of seriousness; this single point could make or break your freelance success). Work a traditional gig and you know what you’re going to be paid week in and week out.
- Not only can you add your personality to your office design as a freelancer, you also get to pay for office equipment, furniture and designs. Employers handle office design and utility costs associated with office space at traditional jobs.
- Tax deductions can expand significantly if you freelance. However, you generally won’t have to keep receipts for deductions you take as a traditional worker.
- You have a good deal of input in when client meetings will be held as a freelancer. Work a traditional job and you best adjust your calendar to meet the client’s demands.
- Even if you end projects because a client is proving to be difficult, you can keep your career moving forward. End a project early as a traditional worker and you could get dinged in your performance review, salary increase, bonus or worse – be shown the door.
- Build your client list and you could double or triple your income in a matter of months or one to three years. At a traditional job, you’d generally have to get a huge promotion to push your income up by 50% or more.
- You’re responsible for your own taxes as a freelancer. This includes Medicare, Social Security and income taxes. Payroll departments handle this for you when you work a traditional job.
- Cash flows can dwindle so much for a freelancer, that you’d want to keep at the very least eight months of gross income in savings at all times, even when client work is flowing in. Unless you got laid off or had your work hours reduced significantly, three months of savings may be enough as a traditional worker.
Keep in mind that the job you choose — whether it’s traditional, freelancing or a blend of the two — has to generate enough income to pay your expenses. There’s nothing worse than busting your rump at a job that leaves you exposed to creditors and bill collectors, even if you can work that job in your favorite pair of sweats or pajamas.
Check back to Write Money Incorporated to read about steps you could take to start preparing for a successful freelance career.