If you're thinking about becoming a freelancer you probably fall into one of two categories: you're sick of the daily grind and your 9-5 and are looking for a more flexible lifestyle, or you want to score some extra cash on the side. Regardless of why you're interested in freelancing, there are some things to keep in mind to ensure success for your fledgling business.
You're a now a small business owner
That's right – if you're getting paid in exchange for a service or product, you need to pay taxes on your earnings. You can register your business on the IRS website, where you'll also apply for your EIN (employee identification number – sort of like a social security number for companies). Most freelancers choose to register a sole-proprietorship, as it's the simplest form of business. It doesn't create a legal entity, but once created, you are responsible for its debts. You can either choose a fictitious name (trade name) or register it under your own name.
Once you've registered your business with the federal government, you also need to check into local licenses. Depending on your location, you may need one to operate just like a brick and mortar business would.
It's all up to you, baby
Sorry – you're not exempt from taxes
As a self-employed individual, you'll owe taxes on the gross revenue you earn. In addition to filing an end of year tax return, you'll also pay quarterly payments on your revenue. This tax is the same thing your full-time employer would normally withhold from your paycheck: income tax, Social Security, and Medicare. If you're just starting out, make your best guess as to how much you'll earn your first year to determine your payments. If you're too high or too low, you'll either owe money or get a refund at the end of the year. Come tax time you'll file either a Schedule C or Schedule C-EZ (for many businesses with under $5,000 of expenses).
Protect your health
If you're a full-time freelancer, you'll no longer have the option of getting health insurance through your employer. Never fear – there are plenty of individual health insurance options available to you. You can either do some research on your own, and buy directly from a large health insurance company like Cigna, United Health, and Anthem, or check out the plans on the Health Insurance Marketplace. If you're under 26, you can stay on your parent's plan.
Just take note of whether you prefer a high deductible plan (which costs less per month but for which you'll pay more out of pocket) or a more comprehensive plan (which covers more medical procedures and visits, but has a higher monthly cost). Choose whatever makes sense for your health and well-being. But make sure you do have health insurance: even young people in good health can have a health crisis that could easily set them back several thousand dollars without insurance coverage.
Every tabletop with internet access is now your desk
Go with the flow
Part of the reason freelancing is so appealing is because of the flexible hours. You're the boss, so you decide when you work. That means unlimited vacation time and are the freedom to work around your other obligations, like family. Many jobs don't offer part-time options, and for those craving flexibility, freelance work is ideal.
However, the flip side to the flexibility is that cash flow is often irregular. Some months you'll be overwhelmed with work, others you'll have a bit more free time than you anticipated, or wanted. If you can cobble together long-term contracts with your customers, you'll be assured a more regular income, but for the most part it's catch as catch can. This type of lifestyle can be enlivening to some, and anathema to others. It depends on your appetite for stability and risk.
You're the boss…in every aspect
Relying on freelance income means the buck stops with you. You've got clients who depend on you to meet deadlines and to deliver exceptional results. Working for yourself can be incredibly invigorating—there's nothing worse than working for a faceless company for a boss who really couldn't care less about you—but you should know yourself and how you operate before taking the leap.
For example, you have to be vigilant about managing your time. Some people don't need a boss hovering over their shoulder, asking about their progress. They can focus when they need to and deliver the goods on time. Others find it more difficult to work when there's no external motivation. They need that outside encouragement (read: casual inquiries about how the project is coming) to stay motivated. If your personality type leans toward the latter, it doesn't mean you won't be a successful freelancer. But just keep in mind it does take a certain amount of discipline.
Yes, I'm the CEO
So you've got a talent that other people will pay money for. Well done, you! Now all you need to do is find customers—easier said than done.
You can start by tapping your personal network: friends, family, acquaintances, old work colleagues, etc. Let them know about your new business and ask if they know anyone who might be interested in your services.
Make sure your digital presence is credible and professional. Keep your LinkedIn profile up to date, and either hire a web designer or use a pre-fab site like Wordpress or Wix to create a personalized website where you can send people interested in learning more. Also make sure you're active on social media (everything from Twitter to Medium to Digg, etc.) because you're building your brand. If people don't get to meet you in person, they'll get a sense of who you are from your online presence.
There are hundreds of sites for freelancers looking for work. Depending on your service, you can apply to be part of Toptal (for experts in their field), or set up a profile on 99designs (for designers), Contently or Freelance Writing Gigs (for writers), or a whole host of others. This is when having a website also comes in handy, as you can use it to showcase your body of work.
No more 9-5! You choose your own work/life balance
Being a freelancer isn't for everyone. Try getting some freelance gigs on the side to supplement your regular income to get an idea of what it's like. If you find yourself itching to work on those projects and excited to get more of them, perhaps a freelance work life is truly your calling. And you have to admit: being your own boss is pretty awesome.
The National Financial Educators Council (NFEC) surveyed young adults in 2017 and asked them what high school level course would benefit their lives the most.
The majority responded that money management was the course that would be most beneficial.
With personal debt is at its highest record and COVID-19 threatening to have the hardest economic effects on youth, understanding money and finances is an important life lesson that should be taught to children at a young age.
The following is a list of the best financial literacy lessons and tips to teach children throughout different life stages.
I thought I had a pretty good handle on my finances out of school. I worked several jobs while attending university and had little to no problem managing my income. However, once I graduated, I realized how much more complicated personal accounting could really be.
There were so many variables I needed to keep track of. Biweekly bills, monthly charges, and general necessities amounted to a heap of confusing numbers that were often impossible to decipher. The funniest part was that I was actually trying to do this by hand (I don't know what I was trying to prove to myself, either).
After messing up for the 17th time, I decided to give Microsoft Excel a shot. I used Excel a bit in school and I knew all the big-wig finance people used it, so what could I possibly have to lose? The answer is about six hours of my precious time. Excel isn't much of an improvement over handwriting and it's still dependent on the user to manually input all of the information. It's like doing everything by hand with the slightest help, meaning that it still required a tremendous amount of time and concentration. Well that was all for nothing, I guess.
It's sort of funny. I was certain that I could manage my personal finances with ease, when it's practically a full-time job. I was already stressed out enough with my first job and I knew I didn't have enough time to give my finances the attention it deserved.
That's why I decided to try out a budgeting app. My best friend told me that he uses an app called Truebill to manage his finances. "What does it even mean to manage your finances?" I asked him. He told me that Truebill was the personal financial assistant I wished I could have. It could aggregate all of my account information into one place and give me specific insights and actions.
I loved the idea of having full control over my finances, especially during a time of financial uncertainty, and I realized that Truebill would be the easiest way to accomplish this. The user interface is incredibly simple and intuitive, so it doesn't even feel like a finance app! Truebill offers a multitude of features, with their most popular being the ability to cancel subscriptions with the press of a button.
Okay, I had no idea how many subscriptions I was still subscribed to. In fact, I wasn't even using a quarter of the subscription services I was signed up for. Subscription boxes, streaming services, my old gym, and even an old subscription to my favorite magazine--it was all there and I was livid. How could I let myself waste all of this money and how did I never catch this? Thank goodness for Truebill.
Truebill also offers bill negotiations. There is a 40% fee based on how much you save and Truebill even claims that there is an 85% chance that they'll be able to lower your bill once a negotiation is requested. Why wouldn't I take them up on this? There was zero risk and I would only have to pay once my bill was lowered (which means that I would be saving money regardless).
More standard features of Truebill include the ability to generate a credit report on-demand and even request a pay advance. I only used the pay advance feature once when I wanted to buy a gift for my mom, but didn't have enough cash in hand and Truebill automatically reimbursed itself when I got my next paycheck.
The credit report is another fantastic feature and practically taught me what good credit meant. Truebill's credit report basically shows you which financial decisions have the most significant impact on your credit score and ways that you can improve your credit month-over-month. I've never had such control over my credit and it feels good.
I'll be the first to admit that I was extremely naive coming out of school. I figured that as long as I was attentive, I could manage my finances with ease. We manage money to some extent throughout our entire lives, but once you're thrown out on your own, it's a completely different story. With Truebill, I've finally been able to take control over my finances and stay on top of all of my responsibilities.
My buddies and I always try to make it out to a game, but we never really care which one we end up at. Obviously we have our favorite sports and teams, but it was rarely about what game we went to or who we saw playing. It was about watching the game live.
In the early months of lockdown, all we had was Korean baseball, and trust me, we loved it. The only issue was, none of us had any idea what the commentators were saying. Even then, a few of my friends weren't huge fans of baseball. They were into sports like football and basketball, ones that moved at a quicker pace with less down-time in between plays.
We decided to see if there were any other events going down and came across horse racing. Yes, horse racing. It was perfect--short, fast-paced, and most importantly, an opportunity for betting.
I had never really considered watching a horse race any time other than the Belmont Stakes, but the prospects of the sport seemed exhilarating. Even better, with horse racing we knew we could still recreate the atmosphere of a race track. Salty snacks? Check. Stale beer? Check. A simple and easy way to bet? Check.
One quick Google search later, we came across TVG, powered by FanDuel. It's an online betting platform that takes you right to the heart of the action. We were a little apprehensive about using a mobile app to place our bets, but TVG's ability to bet on live horse races from all over the world was too good to pass up.
Here are 5 reasons why we are obsessed with horse racing thanks to TVG:
1. Betting has never been easier
Use your phone or computer to watch and bet on live horse races in real-time. TVG offers a bunch of features to make betting even simpler--live odds and handicapping tips leverage recent learnings to help you make your best bet. Not to mention, TVG's exclusive race content and wagering guide offers an under-the-hood look into the strategy behind horse race betting.
2. The biggest selection of horse races out there
If you're looking to drop a little dough on a horse race, chances are your best option is your local race track. But watching the same few horses races over and over again isn't the most exciting thing. With TVG you have access to over 150 tracks worldwide with races happening consistently throughout the day.
3. Get a generous sign-up offer when you place your first bet
Once you register your account, you will be eligible for a $200 risk-free bet. All you have to do is place your first bet and you're covered. If you happen to lose, TVG will insure you for up to $200 as a sort of wagering credit. I may have been a little trigger happy when placing my first bet, so having this insurance was a great perk. There are also a bunch of promotional offers available year-round.
4. Making deposits and cashing out at the touch of button
With a ton of payment options such as PayPal, BetCash, debit/credit, wire transfers, and other third-party services, making a deposit is a breeze. But what about the payout? Depending on your deposit method, your withdrawal will be available in a few days. No more waiting in-line to collect your winnings!
5. Watching live races with your friends while betting is exhilarating
Even when we were watching Korean baseball, Zoom calls with my friends were a little dull.
With TVG, we haven't had this sort of fun in months! Every weekend we'll turn on a race and throw our bets in. After a few races, and quite a few drinks, we'll tally up our winnings to see who won the most! Sometimes it's not even about making money, but just having a good time.
TVG is the perfect way to add a little excitement to an otherwise mundane afternoon. It introduced me to the world of horse racing, a sport I never would have considered otherwise.
The races just keep ramping up and thanks to TVG, I can always get in on the fun.