Some people choose to become self-employed, and others have self-employment thrust upon them. You may have been fired and are struggling to find work, and so freelancing seems to be your only choice. On the other hand, freelancing may seem like an attractive career option, with manifold benefits, and you might be thinking about quitting your day job to work from home.
Whatever your reasons, everyone has visualised being at home in their slippers on a Monday morning, instead of at their office desk. Becoming self-employed can turn this dream into a reality.
Freelancing seems to be increasingly popular in the UK and the US, with 44% of Americans working for themselves. In the UK, 4.1 million people work freelance. Employment in both countries is at rock bottom, as their economies continue to limp on through financial austerity. It’s no wonder that people are choosing to employ themselves.
With many people struggling to balance work and home life, freelancing presents the perfect opportunity to dictate your own hours and choose your own clients – effectively, to be your own boss. Being in charge of your own career makes you master of the money you earn.
Set Your Own Rates
Only you decide how much you’re worth. Your hourly rates are set by you, based on the market, and can easily crank up to double, or even triple, of what you were previously earning.
Your rates are usually higher than an average, employed worker’s because you provide specialist, short-term work that is flexible for clients. Contracts can last from a number of years to just a few days, but either way, salaries are consistently high because employers don’t have to fork out for sick pay, holidays, or any of the benefits a long-term employee receives.
The amount of money you can charge will obviously depend on your field of specialities, and frankly, how good you are at your job. For a new freelancer, it is advisable to keep your charge low until you are in greater demand and have a steady stream of work at your door. Once you’re established in the freelance world, you can start cranking up rates to reflect the market and your talents.
Working for Multiple Clients
How much you work is up to you. You can do as much overtime as you like at high hourly rates, and adopt as many clients or projects as you can handle. It’s also up to you to axe those clients that prove financially unviable and hunt the big spenders. When faced with a client that seems fiscally dubious, run a mile in the other direction. It’s not unheard of for freelancers to be cheated out of their pay cheque.
If you seek financial advice, it is likely that you can considerably reduce your tax. As a freelancer, you are not required to pay as much tax as a normal business. It may be possible to deduct your business expenses from your income, so only your profit gets taxed. Make sure you keep receipts so you have legitimate proof of your expenditure.
This guest post was submitted on behalf of Brookson by financial blogger Francesca, who comes from the UK.