With 2021 starting in much the same fashion as 2020, many people previously working for companies in large offices are now considering leaving it all behind and becoming self-employed in order to work from home. While there are advantages, there are also disadvantages to consider prior to deciding.
You Are the Boss
One advantage of working for yourself is that you are the boss. You make all the decisions. You decide on which jobs you want to take, which clients and what to charge. This gives you flexibility. You can choose to work long hours for three to four days and part time for one or two days. The downside is, you are the boss and all the responsibility falls on your shoulders.
Fluctuating Pay
As a freelancer, it’s up to you to earn your salary. Unfortunately, not every month is lucrative. If you’re not good with budgeting, this can cause you to use credit cards for living expenses during certain times of the year. As a result, you can end up with large amounts of credit card debt. Thankfully, if you end up owing more than you can handle, and want to find the best way to pay off credit card debt, you have a few options. You can consolidate the debt through a loan and have a single, lower payment due each month. Or, you can pay more than the minimum payment on one debt until it’s paid in full and then move onto the next one.
Vacation When Convenient
Freelancers don’t need to ask for permission to take a vacation or plan their time off around the needs of their boss. They can take time off when they need or want to do so. If you have children and it’s spring break, you can book a flight to wherever your heart desires.
Family Gatherings and Events
You won’t have to miss out on your high school reunion or grandma’s 80th birthday as a freelancer. You can attend your child’s recital and schedule appointments during the day instead of at night or on a Saturday morning.
Get Noticed
You work hard for a company and they take the credit. As a freelancer, you enjoy the praise and reap the benefits of a job well done. It’s your name and your reputation that are seen and talked about. Keep up with commitments and produce quality work and your name and brand go up in value.
Your Work Alone
In an office, you may come in contact with someone who is annoying or who isn’t a team player. This can make it difficult to complete tasks. However, when you work independently for yourself, you won’t deal with other workers. You create the pace and the schedule and get to work. Unfortunately, if you’re the type of person who needs a push to meet deadlines, working on your own may not provide a good fit.
Filing Taxes
Unlike working for an employer, you must file your own taxes. If you only need the short form, this should not present a problem. Many freelancers prefer to file their taxes quarterly to reduce the size of the payments due.
Benefits
There are many perks to freelancing. However, one of the greatest downfalls is the lack of benefits. On most jobs, through companies, you have sick time and vacation time. Many also provide retirement benefits such as enrollment in a 401k. When you work as a freelancer any time off is unpaid and you need to find your own health insurance. It’s in your best interest to open your own 401k or Roth IRA to receive benefits in retirement.
Privacy
Working from home is wonderful, in the right environment. Unfortunately, not everyone has the home to themselves. You may have children or a spouse that works the night shift. Members of the household may see you as just being at home and not fully understand that you’re working. Setting the ground rules on day one will help avoid unnecessary stress.
The pandemic is creating an increase in those who prefer now to work from home. Make sure you weigh the pros and cons carefully prior to making the commitment.