Pros and Cons of Freelancing

Pros and Cons of Freelancing

Whether you’ve recently been laid-off, your tired of the daily grind, or you just want to go into business for yourself, starting a freelance business offers a number of incredible benefits that most employers just can’t compete with.

Advantages of Freelance Work

The pros of being an independent contractor include:

  • You’re the Boss – This means that you can choose when and where you work. If you’re a night owl, you can work the entire night and sleep in until noon without ever having to leave the house. Additionally, you can also select what projects you want to work on. If you’re a photographer, you may dread working weddings. This means that you don’t have to accept a wedding freelance job if you don’t want to, but you’ll be able to select only the events or situations that you prefer to take pictures of.
  • You Can Make More Money – If you have the drive, freelancers have the potential to make more money than the average person. Some reports have found that freelancers actually earn 45% more than the average full-time employee.
  • Lower Taxes – Federal and state taxes are not withheld from your paychecks and freelancers pay the IRS directly four times per year, including the self-employed tax in place of social security. They also have access to tax deductions like office, travel, meal, and internet expenses.
  • Work-Life Balance – Between flexible schedules, and the fact that only 29% of freelance workers put in more than 40 hours per week, freelancers have an incredible work life balance.
  • Happier, Healthier – Studies have found that freelancers are happier and healthier, both mentally and physically, over traditional workers.

The Disadvantages of Freelance Work

While there are a number of incredible benefits surrounding freelance work, there are some disadvantages that should be considered.

  • No Job Security – If your clients don’t have any work for you, then you can’t make any money. Even when you’re an employee, you always have work to complete unless the employer goes out of business or you’re laid off.
  • Inconsistent Work – There are months when there’s a ton of work to complete and the paychecks are more than you expected. However, the work may dry up and the next month you’re only making half of what you made the previous month. As an employee, at least you know how much your paycheck is going to be each month so that you can budget accordingly.
  • There Are No Benefits – One of the perks of working for someone else is that the employer will handle all of your health or retirement benefits or bonuses like paid vacations or profit sharing. Purchasing your own health insurance is often more expensive than what is offered from an employer.
  • You Have to Handle Accounting – Taxes, bookkeeping, paying bills, and managing cash flow is up to you. While there is readily available software to assist you with your accounting, it’s an additional task that traditional employees do not have to be concerned with.
  • You Risk Not Getting Paid – It’s not uncommon for independent contractors to have difficulty getting paid for their services. Some clients either don’t pay on-time or they don’t pay at all. Unlike traditional employees where you always know that a paycheck will arrive.

You must be able to motivate yourself – without prodding from an outside source. Though there are many pros and cons of freelancing, only you can decide if it’s right for you.