This is my 10th year as a freelancer. I love what I do, and am fortunate to be able to set my own hours and work from anywhere. My situation is a little unprecedented in that I didn’t move from a “real” job into self-employment. Instead, I went straight from grad school into freelancing.
However, I can see where things might have been different if I had started out in a more traditional career and then transitioned into working for myself. In fact, there are times when I wonder if things might have been smoother if freelancing had started as a side gig rather than the “job” I had to make work so my family could eat.
If you wondering if you’re ready to quit your job and work for yourself, here are 3 questions to consider before you make your move.
1. What’s your financial lifestyle?
My husband and I were already living off student loans when I finished grad school, and we moved so he could work on his Ph.D. We didn’t have a lifestyle to maintain because we were already living a “poor student” lifestyle.
If you’ve been working in the traditional sphere for several years, you might be accustomed to certain comforts. Before you quit, you need to know if you can maintain your basic lifestyle, and what you’re willing to give up.
Some of the other financial items to consider before you quit include:
Benefits: Don’t underestimate the value of benefits. We never had benefits until my husband started work at a new university in the fall of 2014. I’m amazed at what a difference it makes in our finances. Realise that the things you have been taking for granted — employer-subsidised health insurance, retirement accounts, and paid vacation — all disappear once you leave the traditional workforce.
You need to be able to make up the difference.
Emergency fund: You should have a solid emergency fund prepared so you don’t have to go into debt in order to meet your living expenses while you transition. Be ready with your cash cushion so you can handle unexpected setbacks, as well as regular costs.
Taxes: As a self-employed person, you are responsible for all of your payroll taxes, including Social Security and Medicare. You should make quarterly estimated tax payments, and realise that it’s no longer automatically taken care of for you.
Once you evaluate the financial side of things and take steps to protect yourself, you will be in a better position to quit.
2. Can you motivate yourself?
Another consideration is whether or not you will be able to work from home and remain motivated. There are often distractions when you work from home. There are days I find it difficult to get myself going, which makes it hard to motivate myself. But the motivating factor for my husband is that he has to make it in to work because people are counting on him and he has a boss.
When you’re the boss, the story is a little bit different. You might not feel like working, but you need to power through anyway. No one is going to mark your time when you come in, so you have to be ready to enforce your own work habits.
Working for yourself requires a great deal of discipline, motivation, and a willingness to accept responsibility when things go wrong.
3. Is your family on board?
If you’re getting started as a young single person, there isn’t a whole lot you have to worry about when it comes to coordinating with your family. However, if you have a life partner, and if children are in the picture, you need them on board with your self-employment.
They will likely have to sacrifice, too, and they should be willing participants. Success when you work for yourself depends a great deal on your support system, so you need to make this a family decision.
Once you have the lay of the land, and are confident that things will work out as they should, you can take the steps necessary to quit your job and begin working for yourself.
Are you self-employed? What are some other factors people should consider before quitting?
