The workforce has always had freelancers, but freelance work has become increasingly common these days as employment trends have changed and the “gig economy” has become more prominent. According to a 2019 study from the freelance-focused company Upwork, 57 million Americans freelanced last year, up from 54 million in 2014. The amount of time Americans are freelancing is on the rise as well: A 2018 study, also from Upwork, found that American workers performed 1.07 billion hours of freelance work that year, up from 998 million hours in 2015.

Maybe you’re a freelancer right now; maybe you’re thinking about becoming one, or doing some freelance work on the side. Either way, it’s a good idea to understand how it works and what freelancers need to know.

Pluses and minuses

Freelance work is work you do for yourself. You are your own boss. No one is forcing you to take on work you don’t want to do. You get to set your own hours and your own rates, working multiple jobs or none at all. There are both pros and cons to this approach.

When you are someone else’s employee, it’s much more likely you’ll be able to predict when and how much you’ll work and be paid. If you’re freelancing, predictability pretty much goes out the window. You might have tons of work one month, then none the next — and maybe none the next month, either. Furthermore, not only are benefits such as health insurance your own responsibility, so are marketing, invoicing and taxes. It can feel like a lot to handle.

On the other hand, freelance work has some major pluses. Say goodbye to bad bosses — you are the boss. You have the power of choice: If you don’t want to work on a given project or with a certain client or in a particular location, you don’t have to. Want to take a month off to travel? If you have the means, go for it!

Freelance work can also be a lifeline for workers cut off from the traditional workforce. For example, freelancing can be a big boost for older workers who may be experiencing ageism, or who want to bring in more funds or engage their minds in retirement.

Set yourself up for success

If you want — or need — to freelance, there are several steps you can take to maximize your chances of success, such as:

  • Expect the unexpected. Just because you send out an invoice doesn’t mean it will necessarily get paid. Theft, fraud and nonpayment happen in business, which means they can happen to you. So can medical emergencies, lost files, equipment malfunctions and all manner of other issues waiting to separate you from your revenue. Prevent them when you can; for the times you can’t, give yourself as much of a cushion as possible.
  • Budget, budget, budget. When your income is unpredictable, it’s all too tempting to splurge when you’re suddenly flush, which can lead to big regrets during leaner months. To avoid unpleasant reality checks, draw up a budget (be extra-cautious with it when you’re starting out) — and make sure to follow it.
  • Get it in writing. Depending on your work and your clientele, you may not need to draw up legally binding contracts. However, you absolutely need to have a written copy of exactly what you are agreeing to do, for what price, on every single job. If the work needs to be done at a certain time or place, that needs to be in writing as well. Email threads are great for this.
  • Consider delegating tasks. Since you are your own business, you’re in charge of everything. There are still only 24 hours in a day, so it’s very easy to spread yourself too thin. It may be worth your while to hire some tasks out, such as website design, tax preparation or invoicing.
  • Set boundaries for yourself. The freelance life can make you feel like you need to work nonstop. But burning yourself out won’t help you, your business or your clients. Take the time to figure out what boundaries you need for sanity’s sake — no work on weekends, maybe, or no more than 50 hours per week.
  • Remember what you’re working for. You are more than a worker, and your clients aren’t the only ones who need you. Take time to hang out with loved ones — really hang out, not just sit near each other. Smell those flowers, read those books, see those movies. Travel, play and laugh often. Life is a lot more than a job, and that’s true no matter who your boss is.