- In just five years, the number of US freelancers grew from 57.3 million to 70.4 million.
- You have to be comfortable being your own boss, as you have to handle your own tax payments, get your own benefits, and figure out your work schedule.
- You will also likely work more hours, but you’ll get to choose your own assignments, which is appealing.
Have you ever felt the urge to quit your W-2 job and become a freelancer? Many people are in the same boat, and the number of freelance workers is on the rise. Zippia found that in 2022, there were 70.4 million freelancers in the US, a number that has been steadily rising — in 2017, there were 57.3 million of us. Plus, 82% of US freelancers are in fact freelance writers, meaning I’m in an excellent company indeed.
I went from a career change in 2021 to a beginning freelancer in 2022 to a full-time freelancer in early 2023. Along the way, there were many signs that I was ready for it. Have a look at the following 10 ways to tell if you, too, might be ready to give up that regular paycheck in exchange for greater flexibility and indeed, greater happiness.
1. You’re prepared to be your own boss
Can you handle being in charge of your own work? When you’re a freelancer, you’ll have clients, but it will be up to you to decide on a work schedule. I recommend setting up a semi-regular routine for yourself, as it’ll be easier to get in the headspace to work effectively.
You’ll also get to choose the kind of work you want to do, which is easily one of the best things about being a freelancer. If you struggle with time management, staying on task, and keeping motivated, however, freelancing might not be a good fit for you.
2. You have a place to work
You likely won’t have a workplace set anymore, and if your work is only on a computer, you can often quite literally work from anywhere. This isn’t to say you’ll be able to work everywhere, though, as outside distractions can have a negative impact on your work.
Having a dedicated home office has been excellent for my productivity, and while I can and do occasionally work elsewhere (be it from my living room couch or another country if I’m traveling), I get the most done in my home office. If you don’t have room at home to work effectively and don’t mind the extra cost, you might consider renting office space to work from. Failing that, there’s always noise-canceling headphones.
3. You have the right technology
Your equipment needs will vary based on your work, but at very least, you’ll likely need a decent computer. This means that you may need to rethink that plan to use your tired old laptop to launch your freelance career. Consider buying a refurbished computer (and other necessary equipment) to save money — if you buy from the manufacturer, you can be sure it’s been thoroughly inspected and will function like new.
4. You have significant savings
Having cash savings (say, in the form of an emergency fund) is such an important part of money management. It’s even more crucial if you’re giving up a predictable paycheck, though. The common wisdom is that you should have enough to cover three to six months’ worth of expenses, but if you’re hoping to quit that W-2 job and go it alone, it’s a good idea to have even more.
Aim for six to 12 months’ worth of cash, just in case you lose a client and end up taking some time to make up the income loss. And if you keep the money in a good high-yield savings account, you’ll even earn some interest.
5. You have enough work to stay busy (and paid)
Speaking of your clients, you definitely want to make sure you have enough work before quitting your W-2 job. It can be exhausting to cultivate freelance work alongside a full-time job, but it’ll be worth the effort. And if you’ve got the cash savings we discussed above in addition to a solid client base, you can keep your stress levels down during those crucial first months as a freelancer. Make sure your budget is up to date, too — it’s important to know how much money you absolutely need to get by, to create an earnings target for yourself.
6. You have a tax professional to help you
When you’re self-employed, you’re responsible for paying your own income taxes, and they’ll be due on a quarterly basis (in January, April, June, and September each year). Personally, taxes intimidated me even before I became a freelancer, so it was crucial for me to hire a CPA to handle my yearly tax returns and also advise me on how much to pay every quarter. Your tax professional can help you figure out which deductions you might qualify for (such as the home office deduction) and handle the complicated math for you.
7. You’re able to keep work expenses separate
Speaking of taxes, it’s also important to keep excellent records of your business expenses so you can deduct them in tax time. To that end, you might want to consider applying for a small business credit card and using it to pay for anything you need to do your job. It’s much easier to keep track of those expenses and keep them separate from your personal purchases, and you can earn cash back and other rewards.
8. You’re comfortable with working more (but also getting flexibility)
For many people, becoming a full-time freelancer means giving up the traditional 9-to-5 schedule. I wish I could say that this means you’ll get to work less than when you had a W-2 job, but in my experience, this hasn’t been the case. I work more now than ever before, but I can take breaks whenever I want, and if I have an appointment during the day, I can easily make up the time later (or not at all, if there’s nothing pressing to do and I don’t ‘don’t feel like it). As I write this, I can see a blue sky from my office window and I’m looking forward to getting outside for a walk soon. That beats the pants off another endless Zoom meeting.
9. You can handle procuring your own benefits
As a freelancer, you’ll have to figure out your own benefits, like health insurance and a retirement plan. This can be a pain (and a financial one, at that — marketplace health insurance plans are expensive), so I recommend getting help if you’re overwhelmed. Your state likely has insurance brokers, and you could consult with a financial planner to discuss retirement plan options.
10. You want to!
I know I put this one last, but in some way, it really is the most crucial consideration of all. Becoming a full-time freelancer is a big step that can change your life. If you’re feeling ambivalent about your W-2 work, are tired of meetings (maybe it was just me), or just long to be able to choose your own assignments, these are all good signs that the freelance life could be great for you.
I love being a full-time freelancer, and while it was a huge change, it’s been worth it so far. If you’re thinking of going freelance, decide based on the considerations above — and good luck!
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