Can You Afford to Freelance Write Full-Time?

Ultimately, the question of whether you’re ready to make freelance writing your full-time job comes down to whether you consistently make enough money to pay all your bills each month.  But just how much money do you need to make to quit your job and freelance full-time? I don’t know the exact number, but I can tell you how to figure it out.

You need to be able to pay all your current bills and expenses. So, add up what you spend today – rent/mortgage, food, utilities, internet, credit card bills, student loans, auto insurance, etc.

Then, you’ll have to pay taxes. Right now, your employer deducts your income taxes from your paycheck before you get it. The exact opposite will happen when you start freelancing. You’ll pay your own income taxes on a quarterly basis out of the freelance money you’ve made. Calculate your estimated taxes so you have an idea of what you’ll need to send the IRS.

Think about whether you’ll keep health and dental insurance once you stop working. You can shop for some quotes with private insurance companies, but if you have a pre-existing condition that prevents you from getting private insurance, you might consider using COBRA (which can be quite expenses). I don’t recommend going without at least some type of basic insurance. Even if you’re healthy, you never know when an accident might put you in the hospital. Insurance can help offset those medical expenses.

Add the cost of taxes, health insurance, and your other monthly expenses and you have an idea of what you need to make each month to support yourself completely on freelancing.

If the numbers – your expenses and your current writing income – don’t quite match up, that doesn’t mean you can’t afford to freelance full-time yet. You may have to scale back on certain unnecessary expenses until you make more money. Look over your current expenses again and see what you can cut out.

When I left my full-time job, my freelance writing income wasn’t enough to completely support me. Fortunately, it only took a month to bring my writing income to a level that would pay all my bills. Just in case it didn’t, I had enough money saved up to support myself for six months.

Honestly, if you wait until the numbers are right to start freelance writing full-time, you may never make the leap. Of course, every freelance writer is the different, but you may very well able to afford full-time freelance writing if you:

  1. Can cover a portion of your expenses with your current freelance income
  2. Have enough money in savings to supplement your freelance income for at least six months
  3. Have a marketing plan and know where to get new clients

You need to have all three things before you decide to make freelance writing your career. Without solid finances, you could end up taking on jobs you hate or worse, you could end up back in the working world.

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LaToya Irby is a full-time freelance writer and a graduate of the University of Alabama. She primarily writes about personal finance, freelancing, and other self-employment topics.

3 thoughts on “Can You Afford to Freelance Write Full-Time?”

  1. Before I first started my own business in 2004, my husband and I transitioned to living solely on his income. We redirected my income from my job to be direct deposited into our savings account. After about nine months, I quit my job and began working full-time on my own. Not only did that nine months prove we could live solely on his income, we were actually able to build up a very nice cushion in savings.

    Even though we have had two incomes again for quite some time, we continue to live on the one income rule. The rest goes into savings and to pay for extras like entertainment.

    Even if you are single, I think you can do the same sort of scenario by living off of your freelance income for a while while banking your salary (or vice versa). Either way, you prove you can do it before you make the leap and have reserves on hand.

    Reply
    • This is a really great point, Stacey.

      I still do a fair amount of onsite work for a large employer who I worked for before going freelance.

      When I first started freelancing, I dropped the work from them completely and relied solely on my freelance earnings, which was a big mistake.

      I started working with them again a few months later and made the decision that I would only stop working with them once my freelance earnings exceeded those from the company.

      I’m now at that point, but rather than ditch them completely, I’m doing exactly as you’ve said and place the money I receive from the employer directly into a savings account (or using it for other purposes, such as luxuries or entertainment).

      When I do decide that I need the time the employer takes up to take on more clients, I’ll have a financial cushion to fall back on should the freelance work dry up temporarily.

      Reply
    • Financial planners for a long time have advocated the “live on one income and save the other” approach, and it’s really nice to see someone doing it successfully. And excellent tip for those working two jobs independently rather than splitting the burden with a partner!

      Reply

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