As a salaried employee, you'll enjoy certain job benefits, such as a steady paycheck and subsidized health insurance. Despite these perks, a lot of people are leaving salaried work behind and going freelance. In fact, in a recent research report, freelance platform Upwork says that 35% of workers were freelancers in 2021. That's an increase from the 33.8% who were freelancers the year prior.
If you're thinking of going freelance but aren't sure whether it's right for you, it's important to consider the pros and cons. Here's what you need to know.
The benefits of being a freelancer
When you're a freelancer, you get to set your own hours and schedule. And that could work to your advantage in several ways.
First, it could make it possible to strike a better work-life balance. If you have kids, it could also mean having to spend less money on childcare. Parents of young children who aren't old enough to attend public school often lose a large chunk of their earnings to daycare expenses. If you want to avoid having to shell out a ton of money for that cost, then freelancing may be a better solution for you.
There are other potential savings to be reaped by freelancing. For one thing, you may not have to spend a dime on commuting. And if you're able to do your work from home, you also won't have to pay for business attire or incidentals like meals. Granted, when you're salaried, you're not required to buy lunch every day, but if you work in an office, the temptation to do so can be greater.
What's more, being a freelancer could mean boosting your pay. It's often the case that freelancers can charge higher rates than salaried employees for the same work. The reason? Salaried workers get benefits, so companies tend to pay them lower wages. If you don't need workplace benefits -- say, you're married and can get health insurance through your spouse -- then going freelance could help you come out ahead financially.
The downsides of being a freelancer
While going freelance could mean enjoying higher wages and more flexibility, you might also have to grapple with the uncertainty of a less-than-steady paycheck. Freelance work can ebb and flow, so you may go through periods when your earnings take a hit.
Also, as a salaried worker, you're paid on a preset schedule. When you work freelance, you may, at times, have to chase clients down for payment or deal with it when they're late. That could result in some financial upheaval. In fact, if you're going to become a freelancer, it pays to make sure you have a decent chunk of money in your savings account in case your workload dries up periodically or clients aren't timely with payments.
Another drawback of freelancing? Getting no paid time off at all. If you have a child who gets sick, spending the day caring for that child could mean losing a day's pay. And you might struggle to take a vacation knowing that doing so means forgoing income for a while. And that could negate the better work-life balance freelancing is supposed to help you achieve.
Is the freelance lifestyle right for you?
If you're not sure whether freelancing will work out well for you, here's a good bet -- talk to people who are doing it now. And if you don't have friends who freelance full-time, reach out to your social media contacts and ask to be connected. In this day and age, it shouldn't be too difficult to find someone in that situation. Hearing what it's really like to be a freelancer might help sway your decision -- and help you approach your choice with more confidence.
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