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:
- Can cover a portion of your expenses with your current freelance income
- Have enough money in savings to supplement your freelance income for at least six months
- 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.