For most of us, the dream is to go full time freelance. Our own rules, our own schedules and great work being produced on a regular basis. However, as with any other job, freelancing comes with challenges, and it’s important that aspiring freelancers are aware of these challenges before going full-time as an independent contractor.

From filing specific paperwork to paying quarterly taxes (yawn), freelancing comes with its own set of unique rules that must be followed. Just because we are full time freelancers doesn’t mean that we aren’t still working extremely hard. A great way to maintain focus is to truly treat your full time freelance work like a business. Make sure you understand all the risks and benefits of this new position. For example, what do your retirement savings look like? Do you have health insurance? How much should you have saved for your own paid leave? Family planning, vacations and more can all be impacted by a freelance lifestyle and career.

Along the same lines, write up roadmaps – one month, one year, three years – to really maintain focus on your goals. Creating a business plan creates a business identity that allows you to formalise your freelance efforts. There are many financial exemptions and saving opportunities that it’s important to be aware of as a self-employed person.

Access to capital is also a major move. Having a line of credit to access (or just access to capital in general) can offer flexibility for a new freelancer. This can help you grow your business in terms of purchasing power, and it can also help sustain you through the lean times—when you’re waiting for payments, aren’t finding enough new clients and so on. It’s a double-edged sword, of course, so it’s best to tread lightly when possible.

Making sure you have your network down is also a great way to ensure consistent activity. Create a spreadsheet with a list of names, numbers and other contact details so you know who to reach out to when/if things start to go a little quiet. 

As a full time freelancer, you are also your own accountant and HR department, so an eye on cash flow is crucial. Being sensible here is also a must, so plan and budget for emergencies and times of hardship. It is important to budget for projects to fall behind for one reason or another. Make sure you have enough cash flow to sustain yourself and your freelance business.

There are other financial elements that should be considered when going freelance full time, namely retirement (pension) and general financial advising. Full-time freelancing means you’re no longer working for an employer; you’re working for yourself. Consider speaking to a financial advisor about your retirement account(s) and your options when you’re self-employed versus contributing to a company 401(k). It’s essential to consider the benefits and the risks associated with changing how you’re saving for your golden years.

Furthermore, never underestimate the power of a strong credit score. One of the essentials of being a freelancer is the ability to have high-limit credit cards and lines of credit to grow your business and trustworthiness. 

Full time freelancing also means you’re responsible for the self-employment tax and other small-business taxes. For many new business owners, that’s a hit they’re not used to once April arrives. You should estimate a 25% to 28% tax bracket and devote that amount of your paycheck to a dedicated savings account for taxes. 

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