Six Lessons I Learned After Becoming a Full-time Freelancer

I’ve been putting off writing this article. I’ve been putting off writing anything, really: I quit my salaried job and went full-time freelance with the idea that I’d work a few hourly jobs fact-checking, researching and editing from home, which would clear up time to write.

That plan proved to be more than a little idealistic. Writing is so nebulous: How many hours will an article take me to write? If it takes two hours and pays $50, I make $25 an hour—respectable. But what if it takes three? What if it takes five, and I wasted all the time I could have spent doing work where I could have been paid hourly? What if I decide to work on something I want that pays little or nothing, like this essay? How do I fit it in then?

I’m lucky: Right off the bat, I’ve got a growing collection of hourly jobs that will, with due diligence and some hard work, keep me fed and pay the rent. But I’ve never thought so much about time, money, and what my hours are worth than I have since leaving the structure of a salaried job.

I don’t get paid to pee anymore. It’s a very stressful thing.

Let’s take a step back: I’ve been freelancing for a month and a half now, but I’ve been thinking about it for almost a year. Or forever, really—I always dreamed of working from home, freelancing for a living, just like any good journalism grad does (at least those not angling to edit magazines or work as bureau chief for the New York Times). I started with spreadsheets, as I always do, figuring out how much I spent each bi-weekly paycheck on groceries, restaurants, bars and everything else, then dividing it by 14 to figure out how much I spent each day.

After adding in rent, loan and credit card payments and savings goals, I plugged all my numbers into one of those online calculator things and it spit out the hourly fee I should charge. I almost vomited. I didn’t deserve that! No one would pay me that. Right then, I saw my future pretty clearly, still unhappy in the same job, and figured, well, that’s it. That’s all I’ll get.

But as is often the case, a series of quite-fortunate events pushed me out of the office and into my living room. One job offered me an hourly rate only a few dollars less than the calculators told me I needed; another offered almost double. I would be okay! I’d quit my job, I’d live my dreams, I’d do all the writing I never did before.


Lesson 1: Freelancing doesn’t cure procrastination

Quite the opposite, in fact, especially if you’re lucky enough to have hourly work to fall back on. On the surface, working for yourself, from home, opens up endless free time for all those projects and articles you’ve always wanted to write.

But no one told me the dirty little secret of freelancing: All those hourly wage calculators, the ones where you input your rent, your expenses, how much you want to save, etc.? They assume you’ll be working at least six (and more likely seven or eight) hours per day. Not working-in-an-office working, but billing working. Actual work hours you won’t feel guilty to put down on a timesheet.

My mom laughed when I told her I wanted to work at least eight hours a day: Allocate 20 percent of your time for goofing off or whatever, she said. But I can’t afford to do that. I have rent to pay and food to eat and cats to cuddle.

Most days, I bill eight hours of client work, which adds up to much more actual time. Making and eating lunch? Can’t bill that. Afternoon break to play Candy Crush on my iPad? Can’t bill that. Quick mid-day gym excursion? Can’t bill that. Not to mention that working eight hours—actually working—can be really exhausting. Salaried, there’s some built-in luxury: Your employer won’t dock your pay if you accidentally fall down a Wikipedia hole. It’s okay to let your mind check out every once in awhile. When that happens now, I don’t get paid.

I enjoy my work. I’m working with great people on fun, interesting projects. But work can be exhausting.

So the procrastination I thought would be cured by all the ~*~ magical freelance free time ~*~ is still hanging around.

“I’ll write this article after I’ve built up a good money base for the month,” I say. The spreadsheet I built says I need to work at least 7.5 hours a day for the rest of the month to break even; another hour a day to have some money for savings and extra credit card payments. I like watching that number drop—it’s automatically calculated based on how much I’ve worked already, so if I put in a really long day, it’ll decrease to 7.25, 7.14, or 7 hours per day still needed. “Later in the month, I can afford to squeeze in personal writing.”

But later in the month comes and even if I can afford to focus on personal projects for a while, at that point I’m so enticed by the idea that more hours equals more moneys forever and ever that it’s hard to put hourly work aside. In my salaried job, extra work meant nothing. I didn’t get paid more if I stayed late. But once I reach my “pay the rent and bills” benchmark now, I can keep going. Hello, alumni ski trip! Hi there, paid-off credit card! I can see you all down the road!

I’ve got a few articles that have been sitting in my to-do inbox for weeks and weeks now, for people and websites I really admire (like this one!) and who I don’t want to think less of me because I’m prone to procrastination.

I’ve been trying to think of a good way to explain just what it is about freelancing that makes these promised, unfinished projects weigh more heavily, and I suppose I can sum it up as such: I’m still a procrastinator, but now there’s the added pressure of this is what I want to do, and I quit my job so I could, and now I can—if I just do it. And what if I fail?

The concerns about money, about budgeting, about allocating my hours to my clients and my personal projects are just a veneer and an excuse. But they sure do make it easier to push off something that terrifies me.


Lesson 2: Health insurance is impossible and seriously, what do you guys do?

My company health insurance expired the day I quit. Luckily, I live in the great United States of America, where our government ensures no one will die in a manner preventable by proper health care, or be buried under mounds of debt because they broke a finger, or … oh wait.

I first turned to Freelancer’s Union. Through them, health insurance costs $345 per month ($225 for the step-down, crazy-high-deductible plan), plus $35 per month for a totally mediocre dental plan. Yearly, that’s $4,560 (though I hear that the self-employed qualify for health insurance tax breaks). Compared to some plans, that’s pretty cheap (and that in and of itself is bullshit); for me, it’s just at the edge of what I can conceivably afford.

Not that it matters: Freelancer’s Union requires eight weeks of proven, full-time freelance work to enroll. And even then, your coverage won’t kick in for a month, meaning I’d spend the entire month of August uninsured. Maybe that’s OK for some people with a high risk tolerance, but my risk tolerance is itsy-bitsy. Instead, after a bit of research, I went with the Empire BlueCross TraditionPLUS plan. It’s only $184 a month—a little more than $2,200 yearly—and it only covers hospital visits (plus some preventative services, although I haven’t exactly figured out which ones). But it’s cheap. I need cheap.

I still don’t have dental, and I have a cavity, which I was informed about at my last check-up before the doctor asked for $200 I didn’t have to fix it. That’s something to worry about every time I get an achy jaw. My plan doesn’t cover prescriptions; before going off my old insurance, I tried to get three months of Zoloft at once, but my prescribing doctor wouldn’t allow it without a $180 trip to see her. I didn’t have $180. I had two refills left, so I’ve been self-medicating, splitting my doses in half to make them last longer before I have to find a new doctor and get a new prescription. Without Rx insurance, the medication costs $45 each month; my new insurance doesn’t pay for doctor’s visits, so that cost could vary widely. I have no clue. Thank you, America.


Lesson 3: Life without reliability

I got pretty good at budgeting my bi-weekly paycheck back in the salaried days: half of the rent came out of one, half out of the other. Bills from one, fun from the other. And twice a year, the magical extra paycheck arrived, all $1,000+ of fun money or debt-paying money. Now, five-week months are stressful, not exciting: since how much I have to spend depends on how many eight-hour days I worked the previous month, long months that follow short months are particularly trying, budget-wise. Or, conversely, short months that precede long months require more hours each day.

Not to mention the stability of the paycheck disappears. Now I get paid in several lump sums at the beginning of the month. Ish. If I’m lucky. Right now I’m waiting for a paycheck from last month that’s three weeks late—$800. Maybe not much for some, but that’s my rent money. It’s not just the reliability of individual clients that’s up for debate. This check was mailed on time, but somehow disappeared en route, possibly due to our crazy mail-tossing landlady. Or possibly due to the interminable vagaries of the U.S. Postal Service. I don’t know.

So budgeting’s a little different. I’ve switched to using a rewards credit card exclusively, because I can never be sure if my money will come in on the 1st or the 4th or the 11th, and I’ve got three mouths to feed (me and my cats!). I stick obsessively to my YNAB budget—the program is by far the best $60 I’ve ever spent (and its $20 off right now so RUN DON’T WALK to buy it). Since I invoice all of my clients at the end of the month, I know what’s coming in; I add it to my budget before it clears, or is even mailed or Paypal-ed, and spend accordingly on my credit card. And I get reward cash! A whole one cent per dollar I spend! My strategy is a little risky: What if I don’t get paid in full before my credit card bill is due on the 19th? Then I’m on the hook, and have to dip into either my tax savings or my emergency fund to avoid interest.


Lesson 4: Umm, so about that whole “going to the gym” thing…

I live two blocks from the gym. Before, I had a handy excuse for skipping: I get out of work late/I have to eat dinner, guys/all of the evening classes are so full it’s like squeezing into a toothpaste tube. Now, there’s nothing: I’m home for the mid-morning classes. I can start work whenever I want. And dinner isn’t for eight hours.

I had this utopian ideal of my future health and fitness when I quit my job: going to the gym each morning; cooking healthy, happy desk lunches; afternoon yoga and daily meditation.


Yes, you will find ways to justify skipping the gym even though it’s a three-minute walk away. And the days I do get there (I try to go Mondays, Wednesdays, and Fridays), it totally screws up my whole day. Start work whenever I want? Sure, but that means I’ve gotta work until at least 8 p.m., and that’s if I take no breaks. Today is a Wednesday. I left the gym at noon, and I’ve been working on this article for almost an hour. To fill today’s hours, I’ve got to work until 10, at least, and probably later. Wednesday date nights are no longer as exciting, that’s for sure.

And that healthy food thing? I mean, sure, it’s a little easier to cook healthy lunches for myself. But I’m at home, where there are snacks, and where (thanks to a recent testing assignment) there are popsicles aplenty. And I find myself antsier in the evenings, ready to get out of the house, prone to begging to go to a bar or restaurant—anywhere with people!—the second my boyfriend shows up. There go healthy dates with popcorn and a movie, replaced with expensive and unhealthy nights at dive bars and sushi restaurants. I just spent the whole day on my couch. It’s a work couch. I use it for working. It’s not a fun couch. 


Lesson 5: Death and taxes. Mostly taxes.

HOW MUCH SHOULD I PUT ASIDE FOR TAXES? I don’t know. I’ve looked here, but I don’t know how to account for taxes I already paid through my salaried job. I’m putting aside 25 percent of my income. Is that enough? Probably not? I don’t know! I don’t know if I owe quarterly taxes, or even when quarterly taxes are due, and I’m sure getting an accountant on the phone could answer all these questions but accountants cost money.

So I guess for the first year I’m just winging it, and if it comes out at the end I owe, like, $6,000 or something I will cry and hate myself forever.


Lesson 6: Some things are cheaper!

There are some good things that happen when you work from home. (Well, a lot of good things: I like my job 10,000 times more. I get to play with my cats all day. I watched all of Scandal in a three-day binge.) I spend less on transportation. Living in NYC, I used to buy an MTA pass tax-free through my job, but it still cost about $90 each month. Now, I just don’t go anywhere! I use the bus sometimes to get from my boyfriend’s place to my own, and if I’m feeling adventurous, I’ll go out on the weekends, but I’ve only been on the subway maybe twice in the last month and a half. It’s a nice life. Saved: $70 each month.

I spend way less on snacks, mostly because I’ve always got chips stashed around my house and there’s no longer a vending machine downstairs and a Duane Reade down the street for outrageously expensive Diet Cokes on days when I didn’t have cash. Now, I store my change in a pink piggy bank. Literally. I’d count up what I’ve saved, but I’d rather it be a surprise when the bank fills up and I dump it in a CoinStar. Saved: $25 each month.

Laundry costs less—I’m not dropping it off at the laundromat anymore, because I can go in at midday and do it myself. Granted, drop-off service was a bit of an indulgence, but it’s one I no longer need. I’m really bad at laundry (“throw it all in together in a giant heap” is my general strategy), so it’s not as neatly folded and organized, but it’s clean. Saved: $15 each month.

Despite my moaning, freelancing is awesome. I don’t spend an hour and a half on the subway every day; I do chores during little breaks in the workday, creating less of a tragic mess in the evenings. I eat better. Sometimes. I work out more. Sometimes. Everyone should live like this. But I do live in fear: of an accident, illness, or injury; of a delayed payment; of success or failure. It’s all on me, now, not a corporation, not my boss, not on anyone or anything else.

And just for reference, it took me three and a half hours to write this article—almost $100 in lost opportunity cost. I think it was worth it.


Jamie Wiebe lives in Astoria. Here is her Twitter.


28 Comments / Post A Comment

genkiliz (#683)

The Ryan-Nena center lets you pay on a sliding scale for dental services based on your current income. I was at the lowest tier and had my teeth cleaned, two cavities filled, and one tooth removed for about 100 total, but a basic visit is just 20 bucks. This was about 6 years ago, so the prices may go up. Also, prescriptions at the time were just 10 dollars, tho I’m not sure if its the same for recurring or just for painkillers meant for a specific issue. I really cannot recommend them enough!

@genkiliz Relatedly, I have health insurance through my employer but their dental was terribleeeee. I found a plan through my school’s alumni association – see if there’s other group deals like that you can join. It’s not perfect ($50/month, waiting periods, I don’t even know my deductible), but it’s better.

riotmute (#4,454)

Can you share where YNAB is 20 dollars off?

@riotmute SIGH, it looks like that deal has expired.

@riotmute But here’s a link for $6 off. Not $20…but a bit.

honey cowl (#1,510)

Pretty sure that the key to being freelance is to be married to someone who is not freelance.

WayDownSouth (#3,431)

@honey cowl yes, you are absolutely right. Freelancing on your own requires a high tolerance for risk

Vk (#5,782)

@honey cowl That’s not true. I’ve owned my own business/been a freelancer for 18 years. I have never been married, have solid health insurance, and have zero debt except for my mortgage. (Not even a car payment; I usually pay for my cars in cash.)

The issue with most freelancers is that they are fantastic at what they do, but they are not business people and don’t understand the concept of marketing, sales, branding, creating a USP (unique selling proposition), identifying the competition and networking.

Freelancing is not for the feint of heart. But it can be done WITHOUT a sugar daddy or sugar mommy or a working spouse. The best thing a freelancer can do is either find a mentor or take some serious classes on marketing, business planning, projections, and all the boring business stuff. It’s that “boring stuff” that gets you the marketing edge. And, too, there is a difference between being a contractor where you exchange time for money, and creating a business where you create wealth — not just an income. And, no: I am not talking about some slimy, spammy network marketing scheme. I am talking about writers, trainers, graphic artists, instructional designers and other creative professionals who don’t become slave to the exchanging-time-for-money scenario. If you do that, you really have done nothing more than create a job for yourself, and not a bona fide business.

honey cowl (#1,510)

@Vk Thank you for teaching me this wonderful lesson in literally the only comment you’ve made on this site thus far! Congratulations!

jfruh (#161)

PSST, quarterly tax payments are due on April 15, June 15, September 15, and January 15.

Technically you are supposed to pay quarterly payments no matter what if you have freelance income. I believe in practice you can get fined if you don’t pay at least enough taxes in advance to cover what you would’ve owed on salary equivalent to 90% of the previous year.

Having some non-freelance income, on which you had taxes taken out, can actually be worked into my foolproof but actually fairly complicated tax estimation system! Email me at jfruh at jfruh dot com if you want help!

readyornot (#816)

@jfruh it is so awesome how helpful you are to the freelancers among the Awl network readership.

lhorntx (#2,302)

@jfruh I am SO emailing you. I have a full-time salary job and do some freelancing outside of that and I hate even trying to figure it all out :(

@jfruh will so be emailing you.

laluchita (#2,195)

This! THIS. I freelanced doing fundraising and communications for three different small non-profits for a couple of years and all of these things made me crazy. All of them. The ability to put off doing my work to take a nap or go to the grocery store was awesome, except that I then had to make up that work later, so I kind of was either working or avoiding work and feeling guilty about it at all times. When I finally got an office job I was like, zomg, as long as I show up to the office, no matter what I do I’m working. It was amazing. In my experience, tax wise, the money I made in (meager) interest from an online savings account was more than the penalties I paid for not filing my taxes quarterly, and it saved me the stress and hassle of it. But I was also not making a huge amount of money? Also, I did my own taxes for a couple of years, and then finally paid someone to do it the last year, and omg I wish I had paid him every year. He was much more aggressive about deductions than I was, including my estimate of what I spent on lunch every day I was working. He may or may not have been shady, but he would have saved me thousands of dollars if I had used him every year I freelanced, and he charged like $250.

ccq (#1,175)

@laluchita mine costs $350 a year and is worth his weight in gold. fwiw he’s in the heart of a very big metro city so he might be running on the expensive side.

ccq (#1,175)

my setting-aside-tax-money-rule-of-thumb: 33%. yes it’s a lot but it will most likely cover your tax preparation fees and worst case you have extra money (“TAX REFUND”!) (big air quotes).
once you are making serious coin, 80k+, start setting aside 50% for taxes.
take this from someone who winged it her first year freelancing and got a 5-figure tax bill at the end of it. SET ASIDE A THIRD.

@ccq ugh, I know you’re right, and that’s the worst part.

ccq (#1,175)

@Jamie Wiebe@facebook if it would help encourage you, it took me about 5 years to pay off the tax bill. and then of course, i didn’t make nearly as much in the following years, so i was making less money, setting aside more than i had been for that year’s taxes, and paying those back taxes. fun!

don’t let my terrible decisions have been in vain :c someone must learn from them!

Millipenny (#2,921)

@ccq Omg, this. The same thing happened to me the first year I freelanced. What quarterly payments? When I filed that year, my tax payment was so high. I’ve never written a check that big in my life and it was painful.

I’m no longer freelance, but I manage a studio that hires a lot of freelancers for various projects. When I hire younger people, I always remind them to set aside at least 1/3 of their client payments for taxes and to find a good accountant. If they can’t afford or don’t want to pay for an accountant, I tell them to at least spend a few hours on the IRS site. It’s not fun reading, but it’s information they need to know.

There are plenty of upsides to freelancing, but the tax thing is something you absolutely must have a handle on. What are your estimated quarterly payments? What can you write off? What CAN’T you write off? It’s easy to ignore this stuff, but don’t do it unless you’re ready to deal with a HUGE (like new car huge-totally serious) tax bill from the IRS.

NoName (#3,509)

This whole article is exactly why my freelancing career lasted 4 months. I’ve never worked so hard in my life, and that includes grad school and design school – combined.

may june july (#2,862)

I’m happy to hear that someone else is confused by the whole quarterly tax thing! It’s just so darn inconvenient. I’m not a freelancer but I work in a state with no income tax but live in one with a 7.5% income tax, so I have to pay quarterly taxes to the state I live in. I was late once on a payment and owed $110, so I suppose it can kind of be a big deal? It was to me..

I’m about to start an additional subcontracting position that also requires quarterly federal tax payments (and I guess state?), and I don’t really know how to balance all of these things.. So far I’ve found the best way to go about it is just over-pay and get a refund at the end of the year. Yeah, I’m losing the .75% in interest or whatever, but I know me and I would have spent it anyways.

facepalm (#4,409)

I so needed to read this! Hey, Jamie I have freelancing questions I’ve been wanting to ask someone. Since you’re currently in the throes of it – If you wouldn’t mind (and it’s not weird or creepy to you) can I e-mail or gchat you? You can’t PM on this thing can you…

@facepalm yes! email me! jamie e wiebe @ gmail

ccq (#1,175)

one last thought- have you considered billing per project instead of billing hourly? you don’t have to stress so much about the clock and you are rewarded for getting work done more efficiently. the book “the wealthy freelancer” has a good argument for structuring your pricing this way and has a lot of other really good tips for freelancers. not connected with the book in any way, but i read it and it was very helpful for me so i thought i’d pass it on :)

@ccq would love to, and plan to at some point in the future, but my primary income comes from essentially an hourly editorial job I do from home. that book looks great!

LHOOQ (#1,634)

This is further confirmation that freelancing is not for me. I admire people who can do it, but I would turn into a procrastinating, self-loathing hermit. I mean, even more of one.

Charlotte (#1,900)

I’ve been perma-lancing for the past 4 years, so my deal is a little different because I have an income I can pretty much figure out (works for me, but should be illegal, whole tech writing industry seems to be going this way) — I sock 40% of every paycheck away, since that leaves me a little wiggle room for emergencies. I do quarterlies, and still always wind up wrangling with my accountant over whether I have enough cash to stash it in my HSA and IRA or whether I have to give it to Uncle Sam. Here’s the IRS calculator to figure out your quarterlies:
As for health insurance — I have a high-deductible basic plan, and I’m waiting for Montana to roll out the new website to see whether Obamacare is going to help me out. I make too much to qualify for the subsidies, but my sweetheart, who is a builder, will benefit. Seeing as how we’re both over 50, and in the most expensive demographic for health insurance, anything helps. I don’t have dental, but the dental I did have when I was a “real” employee was so crappy that it doesn’t seem to make a difference — also, I have good teeth, which helps.
But the key is to sock 40% away if you possibly can. That’s been my magic number — less than that and I ran into trouble in emergencies.

I respect all the leasons you have learned as a freelancer.Its the story of every freelancer.There are lot of uncertainties but still if work is in hand then freelancing is the best way to enjoy professioanl life:)

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