Is freelancing the key to financial flexibility?
For many, it’s a primary source of income. For others, it’s a side hustle supplementing their regular paycheck. Juggling freelance gigs alongside a traditional 9-5 job demands dedication. Giving up personal time to earn extra is challenging. However, with the right approach, this balancing act can be managed. Here’s how to navigate this terrain successfully.
Ways to Combine A Full-Time Job And Freelancing:
Set Things Straight With Your Employer
You need to gauge your employer’s attitude towards employees who do freelancing on the side. This is usually easy to do – just check your employment contract. Keep in mind that even companies that don’t directly include such clauses in their contracts can take a dim view of the practice. This can make things rather awkward when your employer finds out about your freelance relations. And, yes, your employer will most likely find out about your side gig. Between social media and people’s tendency to gossip, it’s remarkably difficult to keep such things secret. These days many companies force non-compete clauses on their employees. Big corporations are notorious for suing employees who do side jobs for the same clients. So, before taking up freelancing in the same field, or even a different one, thoroughly check your contract. This begs the question – should you even try to keep your freelance jobs a secret? You could make the argument that what you do on your own time is none of the company’s business. The other side of the argument is that honesty is the best policy. It’s up to you to decide which route you want to take.
Set Up an LLC
There are two ways of going about freelance legally. You could register as a sole trader or form your own Limited Liability Company. Choosing the sole trader route may be more convenient if you’re only taking the occasional odd job. Still, you should keep in mind that if you choose this option, there will be no distinction between your business and yourself in the eyes of the law. This means that you’d be personally liable for all of the obligations accrued as a sole trader – including debts. Forming an LLC allows you to create a separate legal entity that’s separate from your person. Doing so takes more effort and means you’ll have more legal obligations as the owner and director of the business. LLCs are also taxed differently than sole traders, so that’s something that you should look into. That being said, there are notable benefits to doing freelance as an LLC rather than a sole trader. One of the major ones is that since you’re a separate entity from the LLC, you’re not personally liable for any debts accrued by the LLC. Naturally, it’s up to each freelancer to decide which option is better for them. However, if you are tackling particularly expensive and ambitious freelance projects, you may want to do so as an LLC. Even if you don’t think that your side gig has a chance of going wrong and landing you in debt, it may be the prudent thing to do.
Get Your Books In Order
Create a system for collecting, sorting, and storing all the paperwork related to your freelance jobs. Be meticulous in your bookkeeping – store all your correspondence, contracts, and invoices. Read up on tax policy in your area – and make sure you comply with all the regulations that apply. Despite all the efforts at digitization, taxation is still a complicated byzantine process that can eat into your precious time. Still, you need to figure out what you owe, how to fill out the necessary documents, and how to file the appropriate paperwork. Keeping up with the legal aspects of running an LLC, as well as doing your 9-5 job and freelance work on the side is no mean feat. If taking care of the paperwork seems too much to handle, consider contacting an accountant to do it for you. This may seem like another serious expense that just cuts into your profits at the end of the process.
Don’t Let Your Gigs Interfere With Your Job
Keep your freelance and full-time jobs completely separate. Train yourself to think of the two endeavors as parallel lines. They may be heading in the same direction, but never the twain shall meet. Give your 9-5 job a 100% effort. Your pursuit of extra work must not compromise your main employment. This means that you may need to avoid freelance tasks that may interfere with your work. It should go without saying but never use company resources for freelance work. This applies to both the materials and the tools your employer provides you to do your job, as well as the time you spend on the clock. A slow day at the office is no excuse for running personal errands on company time.
Don’t Burn Yourself Out
Sacrificing leisure time for additional work may be beneficial for your bank account, but not for your wellbeing. Burnout is a serious problem – especially in times of tribulation, such as the ones we’re living in now. You need to consider your current situation before picking up regular freelancing alongside your 9-5 job. If your job is not at all stressful or comes with a lot of vacation time, you can probably get away with doing freelance jobs alongside it. However, if the opposite is true, doing side gigs may be a terrible idea. Refusing yourself of much-needed rest can have dire consequences on your physical and mental health. Make sure you take care of yourself, as getting seriously ill or suffering a mental breakdown could cost you both your job and your side gigs. Next up, you may want to explore I got it on how to become mentally resilient while working from home.
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