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The financial challenges of a full-time freelancer


With the decision to give up summer sales, I became a full time freelancer. Rather, a part time freelancer because the goal is to limit how much time I spend working until I begin MBA school in the Fall.

Although I don’t have much time under my belt being completely self-employed, I have discovered a couple of financial challenges.

Health Insurance

One of the top concerns that I have is health insurance. We lost our health insurance when I quit full time employment in April. If any of you have ever looked at COBRA, it’s cost prohibitive for most people because your employer paid most of the cost for you.

I investigated health insurance alternatives through a broker as well as some price comparison I did myself online. I could easily find insurance that was half the price of COBRA but even then, it was too expensive for us.

We are fortunate in that we’ll have health insurance when I begin school in the Fall.

Expect your health insurance costs to at least double when you become self-employed – especially if your family has a history of medical issues.


I’m a lists guy. I like constancy. I like stability. I like predictability.

You lose all of that when you first become a freelancer. Before, my budget worked on a set, fixed amount coming in every month. So determining how much I could spend was very straightforward.

Now that my income is variable (and frankly less), I’m struggling with how to best budget. We have some expenses that are set and happen at the same time every month – cell phone bill, car payment, etc.

But our other budget accounts, such as food, are now also variable depending on how much money is in the bank.

Honestly, it’s a disconcerting feeling.

I’ve found that I have to budget for a minimum. What’s the minimum that I expect to earn each month? What’s the minimum that I can spend on pretty much everything?

Consequently, I’m learning that our budget has to be very fluid. I can’t always use in this month’s budget what worked in last month’s budget. I have to be flexible. I have to readily change our allocations based on my expectations for the next several weeks.

Credit Cards

I’ve made some strong arguments against credit cards and a few arguments for credit cards.

I’ve spent the last few years transitioning all recurring bills to auto-withdrawal from our checking account. But since I don’t know, like I did before, that I’ll always have the right amount of money in my checking account at the right times during the month, I find myself moving everything to a credit card so that I can make one convenient monthly payment.

Let me be clear. I’m not suggesting that you live off of credit cards. But they can be helpful if you pay them off every month and don’t incur interest charges.

Your Own Space

I half jokingly told my wife this morning, “You don’t seem to understand the working part of working from home.” To which she just grinned.

With three kids and a wife who want my attention, it’s very easy to be distracted.

There are several options on where to work:

  • Working out of a coffee shop – There is just something romantic about this thought. Sitting at some cafe with a laptop in front of you where the people know your name (think Cheers but without Ted Danson’s hair or ego). Of course, drinking premium coffee, or hot chocolate in my case, can be an expensive habit.
  • Coworking or renting space – I also love the idea of coworking. Basically, you pay daily, weekly or monthly for access to a shared work environment. The idea is that by working around others like yourself, you can bounce ideas off of each other. Cheaper than renting an office, but far from free and only in select cities.
  • Home office – Probably the most economical, but you may face interruptions…lots of tiny little interruptions like, “Daddy, can I do your hair?” or “Here’s the baby.” Time away from work can be just as costly as either of the two options above because you aren’t bringing in money. Also, you may have some outlay if you need to setup an office in your home.


This goes without saying but I’m going to say it anyways – you have to spend time every week or day acquiring new customers.

Depending on your craft, the best methods can vary.

For example, I have a friend who is breaking into the real estate market. More specifically, he has opened a Title business to close on homes. He spends a lot of time at networking events. Most of which have a cost to join.

I recommend looking at sites like and LinkedIn to see if there are groups in your area that you can attend for free.

Some other marketing costs you should consider:

What financial challenges have you found as a freelancer?

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