Welcome to the Healthy Rich podcast, a show about money for misfits!
I’m Dana Miranda, a financial educator and author of You Don’t Need a Budget.
In this episode, I discuss:
🥑 How to overcome fear of instability in freelancing
🥑 How to set yourself up financially before taking the leap
🥑 What kind of work you can do as a freelancer and how to find it
Resources mentioned:
You can always follow the podcast right here via email or Substack, or you can subscribe in your favorite podcast app. The transcript is below. Enjoy!
Transcript
Welcome to the Healthy Rich podcast, a show about money for misfits! I’m Dana Miranda, a certified educator in personal finance and author of YOU DON’T NEED A BUDGET: STOP WORRYING ABOUT DEBT, SPEND WITHOUT SHAME, AND MANAGE MONEY WITH EASE.
In today’s show, I’m answering several questions I’ve gotten from readers about how to start freelancing.
I’m always talking to people who are interested in freelancing, because this is how I make a living — but these questions are coming now in particular in response to a fear of economic precarity with the state of employment since the pandemic and under our new political regime.
Freelancing offers an approach to work that gives you flexibility and autonomy over your time, your mode of working and — to some extent — your income that you can’t get working for an employer.
That makes freelancing and self-employment a really useful method to bolster yourself against an uncertain economy and the whims of a corporate culture that’s kind of gotten out of control.
That could mean making the shift to freelancing full time and away from traditional employment. But it could also just mean taking on freelance work on the side of a traditional job, or to earn some income on the side of your work as a caregiver or parent. It could mean doing some freelancing and some traditional employment part time. The point is to give yourself access to this tool that expands your options.
I want to direct you to my sessions on freelancing, which you can find under Classes at healthyrich.co. Through two classes, I offer guidance on how to start freelancing and how to land your first client, plus you can get some case studies and worksheets to put what you learn into practice.
Those, like all Healthy Rich classes, are available with a paid subscription to the newsletter, which is $7/month or $35 for your first year.
But in today’s episode, I’ll share my journey into making a living as a freelancer and address a couple of specific questions from readers, to give you a quick overview of how to add this kind of work into your life.
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The first reader question is about your mindset around work. They said, “What advice would you give to someone who wants to move toward self-employment but is afraid of losing the ‘stability’ of a traditional job?”
This is in response to a recent essay about the “myth of employment” — that traditional employment somehow offers the stability of a regular paycheck that you don’t get with freelancing or self-employment.
In a lot of industries, though, this isn’t true.
I work in media, where companies have been laying off journalists for decades now. We all thought digital media was the answer, but those companies started in with the layoffs around 2018, after the first signs that social media wouldn’t always deliver the traffic it once promised.
Every colleague I know has either been laid off or witnessed layoffs while they were working for a company (I’ve experienced both).
Corporate America, increasingly concerned with short-term returns, shuffles workers around like desk chairs to meet quarterly targets. Employment is not secure for workers today the way it maybe once was for our parents.
For me, self-employment feels safer. I can diversify my income sources, control my own health care and retirement plan, and no longer rely on a single company to keep my finances secure.
With this kind of control, one company can’t pull the rug out from under me. Losing a client is a bummer — and I’ve dealt with that dozens of times. It can be scary briefly, too! But it’s only one client. I keep the rest of my income coming in while I look for another to replace them.
I also keep some savings in my business that helps me weather any temporary hits to my income.
So these are my two pieces of advice for achieving some sense of stability while making the move from employment to freelancing:
Adjust your mindset to realize that traditional employment isn’t necessarily more stable than self-employment. It’s just a more common path, so it looks more stable.
Set yourself up financially as much as you can before taking the leap.
I talk in my How to Start Freelancing class about building a comfort fund before moving into freelancing if you can, because that keeps your finances stable when your income ebbs and flows as it inevitably does with freelancing.
You could also bolster yourself by freelancing on the side of a full-time job first and building toward more stable work before dropping your full-time job. With some experience, freelance work becomes relatively stable and easier to find, so giving yourself a lot of runway could help.
But you could also just take the leap, if you feel you have the fortitude!
I’ve written before about how I built my freelance career from scratch with no money and no knowledge of how to make a living at it.
I started in 2011 with a little bit of paid freelance blogging and struggled for a few years to even make $1,000 a month. I supplemented freelance work occasionally with stints in food service, which was my only other work experience at the time.
I took a break from freelancing after four years when I got a full-time writing job in personal finance. I stayed there for four years and basically learned how to be a professional writer and honed my chops in this niche.
I left that job for another full-time job, but I was laid off from there after two months, and I went back to freelancing.
Even though I was kind of thrust back into freelancing in 2020 because of the layoff, I was more prepared this time than I’d been the first time. I had about $15,000 in savings to fall back on. I had expertise in a niche. And I had a much better understanding of how to be a professional writer and what clients needed.
I still started with relatively low-paid work, like $150 or $200 articles. But I was able to get it easily, build a portfolio and quickly move onto better and better clients.
When I left full-time work, I was earning a $67,000 salary. My first year back to freelancing, I earned $72,000, and the next two years I earned more than $100,000 each. I could do it in three or four days a week of work, so I was also able to start Healthy Rich and start growing my own thing without having a really long and stressful work week.
During this period of high earnings, I was able to keep my personal savings and also build a cushion of about $20,000 in my business bank account. So I pay myself a salary from my freelance earnings, and that savings is there to keep that salary steady when I have dry spells with client work.
I think that cushion is one of the most important ways to get that stability, so you can pay yourself a regular paycheck instead of living with inconsistent income. If you have a full-time job, take advantage of that to build a cushion before going freelance full time.
But if you lose your job unexpectedly or have to leave it before you can build a savings, just make that savings a priority in your money management plan. Maybe you have to pay your household a little less and rely on credit cards for a while, while you find that stability in your freelance business. That could make more sense long term than putting all of your freelance earnings toward living expenses.
So my answer to the reader’s question is that, because you’re self-employed as a freelancer, you have to build that stability yourself. No one else will provide it. But, in most cases, no one is really providing it for employees, either.
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The second question is a little more specific, but I want to use it to talk about how to figure out what kind of work you could do as a freelancer. They asked:
“I work full-time in Marketing and Communications (social media, event planning, website management, and blog writing) - what freelance work do you recommend adding to my life and what are some tips you have for growing this side of my income?”
For this person specifically, freelance opportunities are really broad in your field. A marketing background gives you opportunities to do social media management, blog writing or website copywriting. Depending on your skills, you could do graphic design or video editing. You might be able to do voice over work or something related to broadcasting.
But the broader tip here is that you can find freelance opportunities in just about any field — or, at least, you can take the skills you learn in any field and apply them to freelance work.
Some types of work are really common for freelancers, like writing, editing, proofreading, design, social media management, coding and development, and marketing.
But you can always translate skills you learn in private sector or even government employment into self-employment. Or you can keep one of those full-time jobs and take on freelance work on the side to diversify your income.
Say you work in health care, for example. That’s a field that quickly comes to mind when I think of something that doesn’t have a quick and easy freelance equivalent. I imagine, if you’re a nurse, you could offer in-home health care services as your own business or something, but something like that comes with some regulation concerns and startup costs you might not want to deal with.
But you could turn your expertise into freelance writing work, or just be an expert reviewer for sites that publish health content. Any kind of expertise like that — health, finance, law, education — is valuable for companies that create educational or marketing content, because they need someone with expertise to make sure the information is accurate.
If you’re more enterprising, you could also enter self-employment through something like online coaching or courses that puts your expertise to work in a different way.
You can also turn whatever your job is into a consultant role just about anywhere. Market your expertise and experience to help other companies do the thing you know how to do, better.
Smaller companies often use contractors for jobs like human resources, accounting and bookkeeping, because they don’t need a whole department or even a full-time employee, but that stuff still has to be done.
In recent years, I’ve seen people turn executive roles into freelance work, too, as “fractional” executives — so “fractional” CEO, COO, CFO. That just means they perform the work of an executive, but they’re working as a contractor or consultant.
If you don’t have any previous professional work experience or expertise, freelancing as a virtual assistant could be a great way in the door. This work encompasses a ton of different things — managing someone’s calendar and scheduling, organizing their email, providing customer service, helping with promotion. It might include some writing or design or marketing, and that could be a great way to get experience in those things. The pay range is pretty broad, depending on the skills required, so look for something that matches your interest and skill level.
You can always set yourself up to market your own services by setting up a simple website and polishing your LinkedIn profile. But the best way to find freelance work is to look for the people hiring freelancers.
Search for gigs through freelance broker sites like Upwork (for low pay if you're just getting started) and LinkedIn (range of pay). You can probably find better work once you have some freelance experience by reaching out to people in your professional network to let them know you're open to freelance work and asking them to think of you if they or someone they know needs anything.
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Something I’ve really loved about freelancing is that it’s made it possible to do my own projects and fold in some more independent income.
So now I make the bulk of my income from freelance writing for publications and clients. But I also make a chunk of income from writing this newsletter, which I did for free and for very low pay for a long time, but now it replaces some of the client work I’d have to take on. And I made some income from my book advance payments, which is something I hope to do with more books in the future.
So freelancing, for me, is not only building a client-based business, but building a diversified business that gives me room to fold in my own projects and pursuits.
But at every point, I’m always working for myself. I don’t work for my writing clients; I offer my expertise and complete assignments for them. I don’t work for my publisher; I partner with them to put out my book. I (of course) don’t work for Substack; I use the platform as a tool to share my newsletter and podcast.
In this way, I’m not beholden to any of the clients, publishers or platforms that help me earn my income. Losing any of them would be inconvenient, but not devastating. I always hold onto autonomy and drive the trajectory of my own career.
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The final thought I’ll leave you with is this: It’s not easy to start doing freelance work — but it’s very simple.
In my How to Start Freelancing class, I recommend just four simple steps:
Strengthen your craft.
Pitch ideas.
Get work samples.
Repeat.
So this is most obvious with writing — learn how to write well and hone your expertise in a niche. Pitch content ideas to publications or potential clients. Write some stuff that gets published, and use that as samples to pitch more potential clients. Through all of this, continue to learn from editors and readers how to strengthen your writing, so you can get more and better work.
But the formula is the same for any field. Focus first and foremost on being good at the skill you’re selling — that’s how you’ll not only get freelance work but build a network of happy clients who will make it easier for you to get more work by word of mouth. Then the job is just pitching and sending proposals for the work you want to do, doing the work and repeating.
This doesn’t mean it’s easy or immediately lucrative to get into freelancing!
You’ll probably start with low pay as you figure out who your best clients are, how you work best and what kind of work you really like to do. You can do that while you’re early in your career or while you still have some other full-time job, so you can afford to deal with some low income.
Then, like with any job, you can gradually work your way up, learn to work more efficiently to make more money in less time, and get yourself work you love to do.
What one financial topic do you wish you knew more about? What would help you have a better relationship with money? Submit your question to guide a future episode!
Check the show notes at healthyrich DOT co for a form to submit your questions. And while you’re there, sign up for the Healthy Rich newsletter to be the first to know when we drop something new.
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