When I ditched my full time job to pursue full time freelancing, I dreamed of success that was tied to commas in my bank account. But three months into the game, I’m making less than I used to and feel financially more secure.
How is that possible?
Now, I was never good with money. I grew up on the lower end of the class spectrum, and never had a good role model when it came to money management. Did I know people who were responsible with money? Sure. But that doesn’t mean I got to learn the ins and outs until I made my own mistakes.
I’ve come a long way from working 80 hour weeks yet barely making rent. I’m no longer shell shocked when I log into my mobile banking app, for one thing, and I make my own payroll (and live off of it!).
So how did I go from crying as I phoned in a student loan payment to Sallie Mae, to being a financially responsible solopreneur?
Leaving my cushy admin job for freelancing has helped me take complete control of my finances. That’s to say, I have savings, I know where my student debt stands, the balances in my bank accounts, and when and how much I can expect to get paid each month.
Here’s how my freelancing start has helped me go from ignorance to control in the last six months.
Preparing to Make the Leap
Please, for the love of God, don’t quit your job without a plan. If hearing the words “latest bank statement” make you cringe, I’m talking to you.
When I decided to leave higher ed for freelance writing, I took a few steps so that my fiancé wouldn’t leave me (I’m only half kidding).
- I promised I would get another job if I needed to. I knew I couldn’t be proud if I was taking this big of a risk. My mantra from the start was and is, “I will work when and how I need to”. This gave me the freedom to pursue my writing for two full months without reservations, with the peace of mind that comes with not being too good for any job.
- I direct deposited part of my paycheck into a new savings account.
When I first gave my notice, I started doing things differently with my money. Instead of paying double my monthly payment (my strategy for some time), I redirected that money into a savings account. I set my sights on two months of expenses that could cover my share of rent, food, utilities, and student loans. Even though it had been a few years of having a decent salary, I had never felt the motivation to save until I was preparing to risk it all.
- I started pitching to writing opportunities before it was time to leave. I put on my hustle hat well before I was freed from my full time job. Every morning I woke up an hour early and scoured job boards, sending pitches and applications every single day. I knew this was the only way to set myself up for success. This grit and determination is how I keep a steady rotation of gigs going, even as a newer freelancer.
Taking these steps before leaving my job prepared me for what was to come. I’m now on my third month as a full time freelancer and I have the most amount of money saved I’ve ever had, four long term clients, and am teaching writing workshops locally to keep fueling my “just in case” fund.
Since I agreed to set myself up for success from the get go, I’ve been able to experience my version of it so far.
This is the part of running my own show that comes easy to me thanks to my past life balancing university budgets.
Whether you use and Excel workbook or a paid accounting software, you need to be on top of your books. It’s not just your financial health at stake: reviewing your invoicing and expenses helps deepen your understanding of your cash flow at any given time, and makes for more realistic goal setting.
I used to get a hefty direct deposit once a month, on the last business day of the month. Now, money hits more frequently but less predictably. Sometimes my invoices get “lost” with accounts payable, and I need to advocate for myself to get paid. This all adds up to needing a solid relationship with my bank account. For the sake of my business, I need to know how much is coming in and going out, and when payments should hit.
Even though my monthly income is lower than it once was, I am acutely aware of my cash flow because I now have to be.
At my last three administrative jobs, I more or less knew what I was going to get for a raise each year, and when it would hit. Because I was blessed with the omniscient power of running payroll, I knew what even higher graded positions were “worth” to the university. My earning potential over time if I remained a loyal employee seemed grim.
And then came freelancing.
Sure, I signed myself up for what were previously the dreaded “what are your salary expectations” conversations each time I pitched a new client. But I got something with these new, frequent, conversations.
Now, there’s a lot to take into account when discussing rates for content writing and editing. I’ve done my research, and at this point can fairly estimate how long projects will take me.
My latest trick? I up my rate a penny with each new client I get.
It works with some clients, and not with others, but either way I am laying the foundation to build the salary that I know I deserve.
And when it comes time to renew my agreements, or when life changes, or when my demand is too high, guess what? The ball is still in my court.
Freelancers have a unique opportunity to learn from starting a new venture. We are our businesses.
Goals tied to income are great, but let us not forget the fringe benefits that come with starting any new endeavor. As freelancers, we have a unique opportunity to improve ourselves while growing our portfolios. We are our businesses.