If you’re not a freelance worker now, you very well might be in the near future. While full-time work has become scarcer, freelance work has grown in the last few years. Not only that, but according to a recent Elance report (PDF link), freelance wages are on the rise, too.
Sounds great, right?
Not so fast.
Yes, freelancing comes with many benefits. In almost all instances you can work flexible hours. You can work from home, which opens up more opportunities for people lacking the ability to drive. If you have the drive you can find more than one gig and earn even more income.
The catches? For starters, you have to find and pay for your own health insurance plan. In a system that still ties health insurance to employment, this becomes an increasing burden. There is also little job security. When a company hires you full-time, they make an investment. It costs them money if they fire you. Companies can hire and terminate freelancers with few added costs. Companies also don’t pay half of freelancers’ Social Security tax. No one realizes this until they’re no longer full-time employees.
So yes, freelance wages might be on the rise. But that’s only to correct for all the added costs freelancers have to bear.
Then there’s the other grim reality for freelancers: getting paid. No, even a half-decent company won’t stiff you. But there might be a gap between project completion and payment. So even if you’re earning a quality wage, you might run into financial troubles while you wait for a check.
As you might imagine, even with rising wages freelancers still need to be frugal. At the same time, they need certain tools to operate. A computer is a given, but there are plenty of applications that make a freelancing life possible. You can pay a fortune for these tools if you’re not careful. Or you can check out this list of free tools to keep costs down while your bank account builds.
If you don’t already have Microsoft Office on your computer, you probably know how much it costs. You’ve been to the sales page, seen the price, and decided that it’s just a bit too rich for your blood. I imagine that companies, not individuals, pay for the great majority of Office installations. The company that hires you as a freelancer won’t pay for Office.
Even with Microsoft’s new plans, which cost $150 per year, the cost proves prohibitive. Two years’ worth of payments is more than a single Office license. Meanwhile, plenty of people get by just fine with Office 2010. Open Office is one free alternative, but it might not provide everything you need.
Google Drive, formerly Google Docs, provides a viable alternative. You can open Office files within it — you can even upload Office docs and spreadsheets. It’s not quite as powerful, particularly the spreadsheets application. But it gets the job done with a simple interface. Combine that with gigabytes upon gigabytes of file storage, plus a quality suite of mobile apps, and you have a free solution.
You will even find many companies use Google Drive themselves to collaborate. Doing some freelance work for BuzzFeed? They use Google Drive for Work to coordinate and collaborate. But even if they don’t, you can get plenty of use out of it and avoid the high cost of MS Office.
One task freelancers will become familiar with that is foreign to full-time workers: invoicing. In most freelancing situations, if you want to get paid you have to send an invoice. It doesn’t end there, either. In many situations you’ll have to follow up and pester the accounting department to pay you. It’s not that they don’t want to pay you. It’s that they’re disorganized like the rest of us.
To take this one step further: freelancers likely need a total accounting solution. Full-time employees have it easy. They get a paycheck tat gets deposited into their checking accounts. Many companies still pay their freelancers with paper checks. Sent through the mail. Imagine the horrors.
Think you can process your checks on a simple spreadsheet? Then consider the tax implications of freelancing. When a company sends
FreshBooks offers a free tier solution that can work well for freelancers. It works best for freelancers working for a single company, since the free tier allows you to manage one client. If you need to manage multiple clients, the first paid tier is just $20/month.
Still think you can handle your accounts on a spreadsheet? You can still take care of your invoices using FreshBooks’s free invoice template. It lets you send and monitor your invoices. It even notifies you when the recipient has opened it, so you know when to follow up. Just as a heads up, you will get emails selling you on FreshBooks services. That’s the price of free, I guess.
When you work from home, you become a topic of conversation among friends. They’re curious about what that life is like. Most of them can’t imagine life outside an office. At some point, someone will say, “I could never do that. I’m just not disciplined enough.”
Let me tell you: when I started freelancing in 2007 I was the least disciplined person I knew. Instead of doing my work I’d hang out on baseball blogs and look up statistics. Then came deadline, when I’d have to go to the library just to block out distractions. Work that I could have spread over a 40-hour workweek I did in 20 hours over three days (Friday-Saturday-Sunday). You can imagine that this affected the quality of my work.
Most of the time when we’re distracted we don’t even realize it. Just a little bit of awareness can give us that jolt we need. Though I’m much more disciplined these days, there’s always room for improvement. I recently installed RescueTime on my machine, just to see my actual productivity levels.
If I didn’t know better, I’d have thought I was back in 2007!
RescueTime requires some setup. It doesn’t always know which websites are distracting and which are research. (For example, I never visit the Huffington Post unless I’m looking for information. RescueTime by default classifies it as distracting.) But once it knows your habits, it is brutally honest in its assessment of your behavior. Spending too much time on Twitter? Down goes your productivity score.
Perhaps the greatest aspect of Rescue Time: It lets you know how much time you’ve actually logged. It’s amazing how much time in a typical eight-hour workday is idle. It might not be totally idle, since everyone has some offline work to do. But seeing only six active hours during an eight-hour day might give you the jolt you need. As will seeing a productivity score in the 70s. No one wants to be a C student.
Bonus Free Tools!
These tools are the three I’ve found most helpful in my freelance career. Creation is key, so Google Drive becomes essential absent MS Office. Financial management is more complex as a freelancer than as a full-time employee, so FreshBooks and Free Invoice Creator give you the necessary tools. Discipline? Many full-time workers have never heard of it. RescueTime makes you aware and will turn around your behavior.
Plenty of other free tools make life as a freelancer easy. Here’s a quick list of my absolute favorites.
Evernote. I would have included this above, but everyone knows about Evernote at this point. Right? Read this Lifehacker article if you’re not already hooked on Evernote. You will be once you’re through.
Workflowy. To-do lists don’t work. The mere act of creating a to-do list gives you a sense of accomplishment. That’s pretty much the opposite of what you want. Then there’s the flip side: those to-dos are basically failures. They’re unaccomplished goals. Workflowy is a bit different. Instead of creating to-do lists, you create workflows. You can do this in dozens of different ways — any way that fits your style.
IFTTTThis is another tool that people have raved about. Set a trigger, using the dozens of integrated apps, and get automated tasks done. It can be a real life saver if you use it to its fullest.
Xmind. The only thing missing from this is a good mind mapper. Freelancers need a constant stream of ideas. The most effective way to come up with new ideas? Mind map them. Pen and paper work fine, which is why paying for mind mapping software is only worthwhile if you know it provides advantages. Xmind is free for the basic version.