Going freelance doesn’t always mean taking a pay cut.

These days, a growing number of people are going freelance, and for good reasons. When you work as a freelancer, you get to set your own schedule. If you’re the type who likes to sleep in, you can load up on work in the afternoons and evenings. If you enjoy taking long weekends, you can work Tuesday through Thursday and have stretches with multiple days off every week.

But there’s a big reason some people might hesitate to go freelance — concerns about earnings. When you work as a salaried employee, you’re guaranteed a paycheck. Not only that, but that paycheck comes on a preset schedule, so you know when to expect the money to hit your bank account.

When you become a freelancer, your earnings aren’t guaranteed. And, they may not roll in on a predictable schedule. You may have some weeks when you see several payments come in from clients and then go weeks at a time with no payments at all.

Still, you may find it encouraging to hear that a large number of people today are doing quite well working for themselves. In fact, this year, 44% of freelancers say they earn more money freelancing than with a traditional job, according to Upwork research. That’s up from 39% in 2020 and 32% in 2019.

Of course, there’s a reason freelancers often get paid more than salaried workers — they don’t get any benefits. That’s a drawback you’ll need to account for financially before going freelance.

What are workplace benefits worth to you?

You may be eager to leave a traditional job and become a freelancer. But even if you manage to command a higher wage for your time, you might lose money in the form of absent benefits.

Imagine your employer currently offers you subsidized health insurance, and buying your own plan will mean spending $200 more per month than what you’re currently paying. That’s a cost you’ll need to account for.

Also, you may be getting $2,000 a year from your employer in your 401(k) plan. If you go freelance, you can still save for retirement by opening an IRA. But you won’t get any free money in that account.

Finally, going freelance will mean losing paid time off. You can build vacation days into your schedule, but it’s harder to plan for sick time. And that could impact your earnings in a negative way.

Is going freelance a smart financial move?

There’s plenty to be gained by going freelance, and you may decide the flexibility it offers is worth a potential hit to your earnings. And to be clear, that hit might happen. Upwork reports that 38% of freelancers now earn less than they would under a more traditional work arrangement.

On the other hand, there’s no reason to assume you won’t come out ahead financially as a freelancer. It may take some time to get to that point, but if you go into that arrangement with a healthy balance in your savings account, you’ll be in a good position to ride out the rough patches.



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