Personal Finance

4 Things to Consider Before Becoming a Full-Time Freelancer

A man uses a laptop on a couch.

As a full-time freelancer , I make my own hours, serve as my own boss, and, well, handle everything myself. I'm responsible for making sure I have enough work and that I get paid for whatever projects I complete.

It's a rewarding but challenging lifestyle . I have an excessive amount of freedom, but it comes with a price. On the positive side, my flexible schedule has made it easier to be a father and a husband. My son, for example, has been off from school for the past two months, and I've been able to take him to the beach, theme parks, and on various other outings.

To do that, however, I've had to work early mornings, late nights, and pretty much every weekend. It has worked for me, but it's not for everyone. The same can be said of full-time freelancing in general. Before you make the leap, consider these potential downsides.

A man uses a laptop on a couch.

A full-time freelancer can work from anywhere in most cases. Image source: Getty Images.

1. You don't get a standard paycheck

I'm lucky in that I'm a full-time contract writer for Motley Fool. I don't get a traditional paycheck, but I have all the work I need and am paid consistently.

In my previous attempt at being a full-time freelancer in the early 2000s, I was not so lucky. I worked for multiple employers, and some of them were very slow to pay. It was a challenging time when I was technically doing well but always had to deal with cash flow issues.

2. You have to cover your own benefits

Most people who have a full-time job get health insurance and some sort of retirement benefits from their employer. As a full-time freelancer, you have to cover those benefits yourself.

It's possible to do both. There are multiple methods a full-time freelancer can save for retirement. Health insurance can be obtained through the Affordable Care Act exchanges and in some cases directly from insurance companies or through trade associations.

3. Time off is up to you

Taking time off means not making any money for whatever period you aren't working. That does not mean full-time freelancers don't take time off. Instead, you have to plan ahead. If I want a week off, I generally start doing extra work every day for about a month ahead.

Essentially, I pad my bank account to be able to pay myself during my vacation. Some freelancers use a different method and set their annual budget or income forecast based on working 49 or 50 weeks a year.

4. There are no sick days

Vacations can be planned for; illness is harder to predict. On the positive side, since I work at home, some illnesses that would keep me out of an office don't keep me from working. In other cases, if I'm sick for a day or two, I can just make up the work over the weekend.

In general, I try to plan for a week's worth of unexpected days off. That could be anything from an illness to an unexpected obligation like a funeral or having to help a family member. It's not an exact science, and there is a risk of getting a longer-term illness that keeps me sidelined for more than a week.

Know what you're getting into

Being a full-time freelancer has been a wonderful experience for me, but it takes tremendous discipline. It would be easy for me to spend more time at the pool or beach. Goofing off is easier when you work for yourself.

To fight that, I hold myself to strict quotas. Yes, I'm going to the beach this afternoon, but only after I finish the work I plan on doing today, and after putting in a few hours over the weekend to get ahead.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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