Ruminations on the Finances of Freelancing

Well, things at both the day job and my freelancing have been on the move.  Just shipped off a load of 12 DVDs I was hired to author from a camp I taught.  Hopefully will be reimbursed for those camps soon.  I’ve spoken to the creator of another web series about the possibility of doing some re-edits in the near future for a screening, and have been contacted to be a freelancer for a small company in Missouri, so I’ve got an experiment of remote editing on the horizon.  In the day job, I’ve officially applied to a job at another store that will hopefully be more in line with what I like to do there (teaching and problem solving as opposed to selling).  I’m also hoping it will bring more hours, and consequently more money.  I’ve been thinking of the idea of financial security for freelancers lately.

In today’s economy, while it is slowly getting better, money is still hard to come by for a lot of people.  I’ve wanted to go full tilt into freelancing, but am still at the day job.  Why?  I can’t afford not to be.  With most of the work in the NJ/NY area paying little or nothing, I need a source of money from somewhere.  Even the day job just barely let’s me break even on personal expenses – and thank god my student loans are in deferment while I’m in school.  I had hoped to make interest-only payments while I was getting my M.A., but there’s not enough cash on hand for that.

So my recommendation to everyone who is thinking of freelancing is to make sure you have a 6-12 month fund to get you through if the market heads south.  Most financial shows recommend 3 months of funding for the average individual.  But we’re not average, we don’t know what the paycheck will be on the next job, or when the next job is coming.  Without that fund, you’re in deep trouble if work dries up.  With that fund, 6-12 months, you can be more relaxed, and play hard ball more effectively.  You won’t feel as if you need to take any job that comes to pay the bills.  I’m looking to transfer at my day job to help me establish a fund like that, as well as start putting away for the down payment on a car and a house.  Once I have that fund in place, I’ll feel safer leaving the day job.  I wouldn’t have panic attacks over money like I do now.  I’d be able to take a step back and plan for the long run more.  Right now, it’s a battle to survive the 2 weeks between the paychecks from the day job, which is only part-time.

So in the interest of your sanity, your credit, and you’re ability to work on the best possible projects, establish that fund.  6 to 12 months may be excessive, but it’s a good safety net.  Not only will it let you deal with dry spells between work more often, but it can absorb the impact of a large financial hit even when business is good.

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