As the world changes, so does the way we work. Professionals can now work from a palm-fringed beach in Sri Lanka or a skyscraper in Tokyo; you can run your business out of a Paris bistro and jet across the world, all while generating an income.
Freelancing is a growing industry for millennials (with 38% freelancing in the U.S.) and young professionals, both full-time and as a means of earning some extra money on the side (aka side hustle).
While freelancing often seems like the dream, and your friend on Instagram who travels the world by the seat of his or her laptop looks as though she is having the time of her life, there are a few things you need to consider before jumping in.
It’s not as easy as it may seem, but if you take good care of your finances, have a good business head and stick to some self-made rules, you have the potential to go far in the freelance world.
As a freelancer, you are responsible for your own taxes. Your clients will not hold back a percentage of your payment to cover what you owe at the end of the year, so it will be up to you to set aside around 25–30% of your income yourself.
It is recommended that you put your taxes in a separate bank account which you cannot access so that when the time comes around to pay, you won’t need to worry. Make sure that you are on top of this and that you file your tax return on time.
Although you won’t get the likes of Antonio Horta Osorio (he’s a banker in the U.K.) knocking on your door, you could wind up with a hefty fine if you don’t meet the deadline.
Holiday pay? What holiday pay?
Holiday and statutory sick pay don’t really apply to freelancers, and it’s important to budget carefully so that if you do fall ill or want to take a couple of weeks away from your emails, you won’t be out of pocket or in trouble.
It is good practice to put away a portion of your monthly income for a rainy day (10 – 15% minimum), so that you and your family are covered in the event of sickness.
For example, if you are an early riser then start your day by cracking on when you wake up and finish early; if you like to lay in in the mornings, start later to allow for snoozing, but work later in the day.
Ultimately, as a freelancer, you have the flexibility to work as much or as little as you want but be sure to honour all contracts and meet deadlines.
As a freelancer, you won’t have anybody sending you on training courses or emailing industry news to your inbox every Thursday morning. It will be up to you to stay up-to-date with best practices and news within your industry! If you’re in graphic or web design, you can follow platforms like Fast Company, Virgin, Millo, The Futur, and others.