As the digital world blossoms, many people around the world are starting to realize that they don’t need to work in a traditional way – commuting hours every day to a boring office job, slaving away under a boss they don’t like, and working the typical 9-5 grind.
The freelancer lifestyle is an appealing option for many looking to find freedom, both mentally and physically. Instead of needing to dress up and go to the office, now you can work anywhere in the world wearing whatever you like. Instead of being fixed to a predictable income, now you can set your own rates and make as much money as you can. Your career is now totally in your own hands.
But a lot of freelancers make a laundry list of mistakes that, if left unchecked, have the potential to catapult them into a situation where they’ll be worse off than when they started. So when freelancing, try to avoid making these common mistakes.
1. Not Understanding Feast or Famine
The freelancer’s lifestyle often falls victim to the feast or famine modality. There’s either a lot of work and an abundance of cash or there’s little work and you’re forced to budget every last penny.
It’s important to understand that income during feast periods is not an unfettered amount of profit. It still needs to be budgeted accordingly and accounted for during moments of famine. Many freelancers pretend like they’re floating on a cloud of money when in reality they are just experiencing a short-term windfall. Because when the feast stops, the famine will begin, and you’d better have enough money to cover all of your costs when there’s no more money coming in.
Something related is the importance of storing away a sizeable portion of your income for tax purposes. Freelancers are usually responsible for paying their own taxes as opposed to having them taken out of their pay check. It’s crucial that you have enough money tucked away when tax time rolls around, or else there will be some angry tax collectors coming to take away all that you’ve worked so hard for.
In general, don’t spend beyond your means, and don’t start thinking that you will always be in feast periods. Save up for the inevitable famine.
2. Not Asking for Enough Money
Setting your own freelance rates is an artform. You don’t want to set them too high because you run the risk of scaring away your client, and it’s because of this fear that many freelancers set their rates far too low.
There’s also the pervasive “imposter syndrome” which makes many freelancers feel like they’re not really good enough to place their work at a high value. But it’s important to remember that you are your own boss, and you need to treat yourself like an employee of your own company. And since you are your only employee, you need to treat yourself like your most valuable employee! This means that if you were working in an office at a “traditional” job, you’d be making a healthy salary, in addition to receiving health and dental insurance, a 401k package, paid time off, stock options, and a whole host of other company perks.
When setting your rates, make sure that you take into account all of the things you need to be a happy, healthy worker. Value yourself and your work to a high degree, and be confident that your specialty is something that can be well-compensated.
3. Not Having Insurance
Freelancers are not typically “employees” of a company, and as such, don’t usually qualify for the benefits that a full-time company employee might receive. This means that most freelancers are responsible for securing their own health insurance.
And having insurance is extremely important! You do not want to be put in a situation where you are forced to choose between eating or paying bills and taking care of a necessary medical emergency. But all too often, many freelancers think they can “risk it”. What happens is they ultimately end up going broke as the result of not being protected during an emergency.
That’s why we here at SafetyWing have created a product that will benefit all freelance workers and digital nomads around the world. It’s a comprehensive suite of travel, health, and life insurance to make sure that all contract-to-contract workers will be protected in case of an emergency.
Again, as a freelancer, you need to make sure that you’re treating yourself as the most important employee at your company. That means making sure you’re able to handle any emergency with ease, efficiency, and knowledge that you won’t go bankrupt!
4. Not Wanting to Say No
It can feel pretty great to have clients knocking down your door begging you to do work for them. It can feel like you’ve finally “made it”.
But if those clients aren’t willing to pay you what you’re worth, you’ll find yourself heading toward an epic burnout with little means to support yourself. One of the things that happens when we are so focused on pleasing is that we forget how valuable we really are. When that happens, we let others control our self-worth instead of deciding for ourselves what our true value really is.
We should never take on clients that are unable to meet our expectations, either monetarily or value-wise. We should only ever accept a job when we are confident that it will a) lead to a mutually beneficial arrangement and b) make us feel good about the work we do.
Now, of course, there are exceptions, and every project should be judged individually. But generally speaking, if the client is lowballing you on price, or if the project is not lining up with your values, then you are much better off telling them (politely!) that you are unable to take the job.
5. Not Staying in Touch
When you’re done working for a client or have just finished up a contract, make sure to let that client know you are available for future work.
Far too often, freelancers think that once a contract is over, their work is also over. But part of the freelance journey is self-marketing, and letting a solid client get away is a surefire way to lose a lot of future business.
Also remember that much of the freelance journey relies on connections. Even if a former client doesn’t have work for you at the current time, they’ll likely know someone who is in need of a really talented freelancer with your exact skill set. And because you have just completed some excellent work for that client, they’re probably going to give you a glowing recommendation to this new potential client.
It’s important to market yourself appropriately when freelancing. Always stay in touch with past clients to let them know that you are available and ready to produce even more high-quality work.
Freelancing Mistakes Turned Successful
Being a freelancer is hard work. Sometimes doubt creeps in and we think it might just be easier to get a “normal” job.
But if we remember why we started down the freelancing journey, and we remember that we are highly valuable individuals who need a healthy level of workplace respect, we’ll be sure to be successful where others have failed.
So as you continue on your journey, don’t fall victim to these common mistakes. Value yourself and the work that you do, and always be looking out for the next big gig!
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