According to a recent Bankrate poll, only 28% of Americans plan to max out their vacation days, while 54% will only use half of their paid time off (PTO). Although these shocking statistics show that Americans are at the office more than necessary, the underlying cause is more of a concern: job security. By taking a vacation, many workers feel as though they’ll fall behind their colleagues, be passed up for a promotion, or gain the scorn of their employers. All this, despite the fact that they’re entitled to PTO as part of their benefits package.
Such an idea underscores the issue of job security in the United States. While many point to health insurance, retirement benefits, and a steady paycheck as the primary reasons for working a corporate job, why are so many Americans leaving paid vacation on the table? The answer lies in the misconception of “stability.”
Enter freelance work.
For skilled people who are courageous enough to enter the freelance world, success is a result of their own hard work and determination. There are no stipulations or seniority and no politics or bosses standing in their way. The problem is that many workers have been groomed their entire lives to become a cog in the wheel; a preconditioned notion that without a steady job, financial and career struggles are imminent.
Unbeknownst to these individuals, freelance work gives you more job security if you’re willing to put in the time. While companies downsize and merge, putting your success and financial stability on your shoulders gives you more control over your career path and earnings. While the idea of digital freelancing full-time is still in its infancy and a foreign idea for some, the truth of the matter is that it’s as secure as you make it.
Is the Income from Freelance Work Similar to Traditional Work?
One of the foremost concerns of aspiring freelancers is with respect to their income. However, there’s no simple answer as to how much you make. A certainty is that monthly income will have its ebbs and flows depending on your client base, ability to expand that client base, and the rates of your services.
You can look at this two ways:
- A building block and inspiration to gain more clients if your income isn’t where you want it to be.
- A job with no ceiling in earnings. At a traditional job, you’ll have to ask for a raise or wait for your annual review to obtain more earnings, whereas you don’t have such constrictions on your income as a freelancer.
Yet this is the most problematic and terrifying part of becoming a freelancer. While you can potentially earn more money, the path to that success is characterized by working tirelessly until you reach your goal. Believing in yourself is crucial to success as a freelancer. If you can channel your inner confidence and hone your craft, you can make freelance work a secure career path. As your client base expands and income rises, you’ll brim with the confidence and knowledge to reach the pinnacle of your abilities.
Balancing Your Freelance Work
A highlight of job security in the freelance domain is your ability to handle multiple clients at one time. Your job security at a company often hinges on the decisions of just a few people and their commitment to shareholders. As a freelancer, you can have 5, 10, 20, or more clients you’re working with at any given time. If one client decides to go a different direction or doesn’t require your services any longer, you still have your other clients to fall back on. This also gives you the opportunity to find new clients who are willing to pay more or provide a steady workflow.
Balancing your gigs, therefore, becomes an art form. Like an investment portfolio, you’ll want to balance your client list between long-term and short-term projects. Locking up a client for months or years at a time or getting put on retainer can at least give you an idea of what your income will look like for the foreseeable future.
Short-term gigs offer flexibility. You can easily get your feet wet in a new industry or try out different clients. If you have a specific niche but you want to branch out to other areas, a short-term job can give you some insight and a taste of what to expect. While you might give discounts to long-term clients, short-term opportunities provide a chance to maximize your income for the right client. It also allows you to forge a long-term relationship and cash that you can add to your steady-income pile.
Work-Life Balance: The Bonus of Freelance Work
Not every job is about how much income you make or your passion for it. Work-life balance is just as integral. While you may feel secure in a traditional job, you have to ask yourself if working all the time without a corresponding social or personal life balance is truly worth it. For many, the financial upturn is worth the hassle; to others, it’s a downward spiral to burnout.
Work-life balance is vital for maintaining order and passion at your job. As a freelancer, you have free rein over this aspect. This doesn’t mean you can blow off work for weeks at a time to travel. But it does afford the opportunity to indulge in hobbies and other pursuits. You can set your own hours to revolve around your tastes and hobbies. Consequently, you can work for 2 hours one day, but you may have to follow it up with a 14-hour day. That’s just part of the trade-off.
Discipline and the ability to meet deadlines aren’t something that most workers have to deal with regularly. But freelancing is a give-and-take career that you can tailor to your wants and needs. That’s security you won’t find anywhere else.
Building a New Skillset
According to a Freelancers Union poll, 56.7 million Americans now do freelance work at least part-time, making up over one-third of the U.S. workforce. That makes for some cutthroat competition among freelancers and a petrifying prospect for potential freelancers.
Yet being a freelancer gives you a unique opportunity to expand your skillset and cultivate the proficiencies you already have. Without being tied down to a 9-to-5 job, you can put aside time to become a better writer, programmer, or web designer. Plenty of websites offer free or low-cost programs that can turn your lack of knowledge into certifications that bolster your resume and impress new clients.
Another stellar advantage of building your skills as a freelancer is that you can learn outside of online or brick-and-mortar universities. Even picking up tidbits of advice from other freelancers can give you an edge on the competition, expand your skillset, and improve upon the expertise you already have.
This provides a unique opportunity over 9-to-5 options. While you may have to wait to gain more responsibility or pay in a corporate atmosphere, the knowledge you learn can propel your freelancing career to the next level.
You may not think of location independence as a trait of job security, but it’s one of the most important. As a freelancer, location independence allows you to “roll with the punches.” If you have to move to take care of an elderly parent or if your partner receives a job in another city, you have the opportunity to migrate without adverse consequences. You’ll have no fear of starting anew or worrying about income. When life presents issues, all you have to do is pack up your laptop and go.
Picking Your Clients
At a typical job, you’re part of a machine. You’re usually assigned a specific task that facilitates a larger, overarching job. Unless you’re on the front lines, you never meet with the client, nor do you get to discuss the scope of a project. While this does free you from some responsibility, you also don’t have the opportunity to forge long-lasting business relationships. The onus of that falls on someone else’s shoulders.
Freelancers have to wear many hats, but picking which clients you want to work with can provide financial freedom and job security. If you don’t like the way a client treats you or if they’re overbearing, you can choose to end your business dealings and move onto another one. There are no messy breakups, no fear of hurting your company financially, and little downside. With the ability to pick and choose your clients, you can piece together a list of companies that make work fun, enjoyable, and lucrative.
Taxes and Freelance Work
When you become a freelancer, you might groan at taxes. You’re responsible for filing quarterly taxes. Overpay and you’re giving the government an interest-free loan. Underpay and you may have to pay penalties and extra interest. While that may sound horrid to the amateur tax preparer, it’s not all bad.
Filing taxes as a freelancer requires you to pay a 15.3% self-employment tax, which contributes to Social Security and Medicare. On top of that, you have to pay any local, state, and federal income taxes based on your income. However, you also have the opportunity to offset self-employment tax. As a result, you can get more money back on your taxes than you would with a traditional job.
Deductions are your best friend as a freelancer. Common deductions include:
- Office supplies
- Cell phone
- Some travel and meals
- Home office
Filing taxes as a freelancer has more red tape than filing a 1040-EZ. But at least you’re in control. It may not feel like a more secure way to pay taxes, but you get to see where your money’s going and how to improve your bottom line.
At a glance, freelance work appears like a gamble. You aren’t sure where your next paycheck may come from, and you aren’t always confident about the next course of action to propel your business forward. But with fear of the unknown comes the limitless potential for self-satisfaction and income. It’s not for everyone, but the benefits of freelancing are evident. Once you get the business going, fear of job security becomes an afterthought.
Are you a freelancer who enjoys more financial and job security than when you were an employee? Connect with Virtual Vocations on Facebook, Twitter, and LinkedIn to tell us what you think. We’d love to hear from you!
iStock image: GaudiLab
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