You’ve dreamed about strutting into your boss’ office and boldly dropping your resignation on their desk — without freaking the fudge out about what you’ve done later.
You’ve longed to work in your super-comfy leggings, nestled with your furbaby on the couch, on projects that make you absolutely giddy.
You’d love to shop the stores at off-peak times, catch that half-price matinee, or simply play hooky some afternoons — just because you can.
So why don’t you go freelance and make all of those things your new reality?
Your financial fear is holding you back.
Roots of Financial Fear
See if this sounds familiar — you’re petrified that you’ll:
- struggle to find enough (or any!) clients
- run out of money and need to crawl back to your J.O.B.
- fail on an epic level, making your life worse, instead of better
I get it. I really do.
You need money.
But your financial fear is robbing you! It’s literally snatching away your possibilities. And that really sucks!
The good news? You can beat it!
You can look it in the eye, take away its power, and, as Thoreau said, go confidently in the direction of your dreams.
You just need a few tools so you can experience financial stability and learn how to deal with financial stress:
A New View on Job Security
Freelancing isn’t financially riskier than having a regular job.
There, I said it.
Yeah, there’s a lot of uncertainty when you go freelance. But how certain is your next paycheck from your employer? This lack of security became even more apparent during the pandemic of 2020.
Your income can go poof! in an instant. Your company could go out of business, lay you off, or decide to fire you.
Hopefully, you’ve got some cash in the bank. If not, you’re going to be in a panic-induced scramble until you find another job.
When you freelance, you have (or should have!) multiple clients. That means, when one (or more) of them say “peace out,” you’ll still have money coming in.
Doesn’t that sound more secure?
That’s because it is! Financial stability is within your reach.
A Basic Budget
You’ve got a budget now, right? Well, you don’t toss it out the window when you go freelance.
You just have to tweak your approach a little.
And if you don’t have a budget (no judgment!), you’ll get the gist of what you need to know here.
Your freelance income is going to vary from month to month. But guess what stays mostly stable? Your expenses!
So, add up the cost of all your must-haves (think shelter, food, utilities, insurance, medicine, minimum debt payments, etc.).
Now you know how much you need to earn per month to stay afloat — without whipping out your credit card or raiding your piggy bank.
When you look at your bare-bones budget, it probably costs less to survive than you realized. That’s good! That means there is less risk to go freelance.
Of course, survival isn’t your end goal. You’d like to have a roof over your head and splurge on a weekly date night, your favorite (but expensive!) eye cream, and the occasional Amazon shopping spree.
And, while freelancing is an amazing way to make a living, you probably want to retire someday.
So, add the monthly cost for your luxuries and financial goals to your bare-bones budget. Now, you have your true earnings target.
Next, take a good look at all of your expenses.
Can you cut any that don’t add value to your life (I’m looking at you, umpteen random subscriptions!)? Can you find ways to save money on your essentials? (Think shop sales, buy used or generic, negotiate rates with your cell phone provider, etc.)
Optimizing your spending means that your dollars will stretch further — and you’ll need fewer of them to pay for life and reach your goals.
Now, that should kick your financial fear where it hurts!
A Well-Fed Bank Account
As a freelancer, some months your income may absolutely suck. But other months, you’re going to rake in some serious cash!
So, when you make it rain, put that extra money aside for when there’s a drought.
You’d save some of your bonus or a part of your raise at your job, right?
It’s the exact same idea. It’s smart to build an emergency fund to deal with surprise expenses. It’s even more important to build a cash cushion for lean months as a freelancer.
Once you’ve got several months to a year’s worth of expenses in the bank, you can actually live off of your cash cushion.
Then, each month, replace what you withdraw to keep that balance high.
The rest of what you make can go towards longer-term goals like shedding debt, buying a house, or going on that European excursion!
An Exit Strategy
You don’t need to quit your job right away.
In fact, if you don’t have at least 6 months of expenses in the bank, you should stay put and freelance on the side for now.
I hear you groan. Staying in a dank cubicle and taking on extra work for the foreseeable future sounds like a great time — said no one ever.
But, your increased patience now means your decreased financial fear later. #Worthit.
Once you start freelancing, you have two potential exit strategies:
- Bank all of your freelance earnings until you have 6-12 months of expenses saved up. Then, quit your job.
- Grow your freelance business until your earnings equal or exceed what you make at your job. Then, tell your boss “see ya!”
The second option is more secure. Your cash flow will be strong and your budget won’t miss a beat. (You still need a cash cushion, though!)
Personally, I went with option #1. With more than a year’s worth of expenses in the bank, I quit my full-time job, with a very part-time income lined up.
It’s definitely a personal, nuanced decision. You do you, friend. I’ll support you either way!
Sure, going freelance can be risky. Relying on one source of income is even riskier.
But, the biggest risk of all?
Giving in to your financial fear, and letting it take away your choices.
When you do that, your dreams are 100% guaranteed to fail.
You know what you can do with that fear, now, right? Give it the finger, use these tools, and do what you want to do anyway.
I’m here rooting for you!
Learn by listening? Download the podcast episode about kicking your financial fear to the curb.