Potential Drawbacks
You probably already know most of the positive aspects of freelancing,
such as the potential to make more money and the ability to work in
your underwear at home or even on the beach in Tahiti. Pretty cool,
right? But there are a few drawbacks to consider, as well.
Let’s take a look at a few of the drawbacks that might make you
reconsider freelancing. (Remember, you can always do freelance work
while employed traditionally if you’re not ready to leap right into full-
time freelancing. In fact, that’s usually the best idea!)
Taxes
Ugh, taxes. It’s something you don’t think much about when you work a
normal job, because your taxes get taken out of your check and the
only time you really have to worry about it is tax season when you have
to file your taxes.
But when you’re a freelancer, you have to worry about taxes all the
time. You have to save money from every payment to cover taxes, and
it really hurts when you have to write out that check to Uncle Sam,
because it all comes in one lump sum—unless you pay your taxes
quarterly.
Taxes for a freelancer can be pretty complicated, so if you aren’t a tax
professional, you’ll probably want to hire one to help you—at least in
the beginning.
Freelance Expert
A good accountant will be able to teach you the basics of recordkeeping
for tax purposes, and they’ll also help you when it comes to filing your
taxes, so it’s a great idea to get a consultation with one as soon as
possible.
Interruptions
Interruptions are huge productivity killers in any workplace, but if you
work from home you’ll soon discover it’s much worse. People think that
because you work at home, you’ll be free to talk to them, hang out with
them, do them favors, etc. as if you didn’t work at all. And if you
protest, they get offended as if you don’t want to talk to them at all.
People who have never worked from home will never truly grasp what
it’s like, so there’s really no easy way to help them understand that
they can’t just expect you to have the ability to drop whatever you’re
doing at any moment for them.
For this reason, it’s a very good idea to turn off your cell phone and go
into a room with a closed-door while you work. Ideally, you might even
want to rent office space so you can have more privacy while you work.
This may not always be possible, but if you can, office space in many
areas is remarkably affordable.
Instability
Finding work as a freelancer isn’t guaranteed, and you may find the lack
of a guaranteed paycheck is too much to deal with. Because work is so
unstable, especially in the beginning, many freelancers work a full-time
or part-time job to supplement their income.
Freelance Expert
You can increase your chances of finding work consistently by putting
yourself in as many freelance marketplaces as possible, presenting a
professional portfolio of work, and seeking references and testimonials
that may help others choose you over their competition.
Lack of Benefits
One huge thing that is a deal-breaker for a lot of potential freelancers is
the lack of any benefits such as retirement and health insurance. While
a lot of jobs don’t offer such benefits, either, most people don’t end up
staying at those jobs for very long.
Health insurance for the self-employed is outrageously expensive, but if
your income is relatively low you can qualify for Medicaid or at least a
reduced price on your health insurance.
Retirement is a huge issue, and it’s important to start saving early. Self-
employed individuals should start an IRA (Individual Retirement
Account) as early as possible and contribute the maximum amount
possible to be sure they have money available for retirement, because
they won’t be paying money into Social Security and thus cannot collect
any when they retire.
Remember, there are drawbacks to everything—even traditional jobs.
Freelancing may not be for everyone, but for others, it’s the only thing
that makes them happy.
