Freelance working and independent contracting is becoming a more and more popular form of employment. There are less people relying on employers and using their own skills, instead. With that choice comes a whole host of new things to consider. What are the benefits? What are the limits and responsibilities? If you think independent contracting is your way to a wealthy lifestyle, consider these points before you take the plunge.
You’re in charge of your own finances
This might seem as much a con as a pro, but when you’re in charge of your own finances you’re not going to see any taken out by employers. At the same time, it means protecting your financial information is more important than ever. Particularly online, you should make sure you keep yourself secure. The computer is an easy backdoor into your finances if left unprotected.
You can set your own prices
One of the better parts of being in charge of your own finances is that you’re also in charge of how much you get paid. Of course, there is a limit here. Particularly, how much your clients are willing to pay for your services. Take proper consideration of how much you should charge, but rest assured that you’re not having any money taken away by employers acting as middle-men.
You’re your own boss
The flexibility of working for yourself is not something to be taken lightly. As well as your own pay, you get to take your own schedule and working hours into account. You’re no longer accountable to anyone higher up in the food chain. Of course, this means that you’re the first and only one in the line of fire against dissatisfied clients.
It can be difficult on your credit
As you’re the master of your own finances, some credit checking institutions won’t look kindly on you. Since you’re not registered under steady employment, getting things like loans and mortgages can be difficult. There are ways around this particular difficult, of course. Contractor mortgage services offer mortgages taking into account your employment where you might it difficult elsewhere.
You’re relying on different payment sources
You won’t be having any reliance on an employer to make sure your full paycheck reaches you. You will, however, be relying on the timeliness and reliability of your clients to get the entirety of the money done for the job. Invoices are a great way to track and keep record of your finances, but they come with risks. Mainly, it’s far from unheard of that invoices are late or go missing. You can use invoice financing to make sure you don’t lose any money while you wait for them, but it’s a risk you should be prepared for.
Your taxes are different
Perhaps not a con in some countries where you do all your own taxes anyway, but everyone who is self-employed has to learn a different way of doing taxes. For some, it means your taxes are no longer done automatically where they may have once been. For others, it means different forms requiring different proofs.