Reality Check: The Inside Scoop on Freelancing

The "free" in "freelancing" says it all. You can work at what you want to work at when you want to do so. You're free to say, "No, thanks!" to a gig because it just doesn't appeal to you. But here's the inside scoop: All that freedom can come with some downsides. In most cases, nobody has your back. If you don't do it, it won't get done. If you turn down freelance work, that's money you won't have on hand when the electric bill comes due.

Full-time freelancers are self-employed. They provide services or products, usually to numerous clients. And they're pretty strong in number. Harvard Business Review reported in October 2021 that more than 25 percent of the global workforce performs in this capacity. It predicts that the number will climb to 90 million workers in the U.S. alone by 2028.

Depending on the type of freelance business you choose as a new freelancer, you may be able to work from anywhere. A freelance writer, blogger, podcast host or graphic design specialist can take care of business from a lawn chair out in the sunshine with a laptop on their lap. You'll most likely save money on transportation – and that's a big bonus as fuel prices rise.

You'll be able to set your own hours, at least for the most part, although even freelance writing will occasionally demand that you meet with a client at a time that's convenient for them, not necessarily for you. Your schedule is largely your own so you can easily accommodate personal issues when they arise. Maybe you're a night owl and you prefer to do your heavy lifting at 3 a.m. Not a problem.

Ongoing relationships with your clients are going to be your mainstay, so do everything you can to hang on to them after you find good ones.

For everything you get, you give up something, as the old saying goes. Perhaps one of the most significant things you'll give up when you freelance is the certainty of a paycheck at prescribed points in time. This is most likely to be an issue when you're a startup or when you take on new clients before you get a firm grasp on whether they're reliable about paying you on time.

You might also find that all that freedom and flexibility isn't necessarily a good thing – at least not around the clock – particularly if you're a people person and you also live alone. The isolation can get to you. You might go days without actually hearing the sound of a human voice – although you'll probably exchange a lot of emails and texts with others.

You can forget about paid sick leave and vacations. You either work right now or you don't receive income. This can be a real problem if you have children who need Mom or Dad nearby when they're not feeling well. You can't tell them to suck it up until you finish whatever you're working on. Having young ones underfoot has derailed more than a few freelancers, so be sure you have some kind of backup childcare in place for times when you really, really can't be disturbed.

Yes, you can choose who you want to work for, but maybe not so much when you first start out. This is when you're making a name for yourself and showing all you can do for your clients. You can't be too picky and you might have to charge less – maybe even a lot less – than you'll be able to after you get your foot in the door. But the Goodwill Community Foundation warns that you'll still want to be at least somewhat discerning. Make very sure that the clients you take on are reputable and are likely to pay you eventually.

Ongoing relationships with your clients are going to be your mainstay, so do everything you can to hang on to them after you find good ones. This isn't to say that you won't or can't ever take on anyone new, but you might want to make your existing client base your first priority. Keep them happy. Let them know you're there for them, particularly if they pay well and on time.

But you don't want to rest on your laurels, either. You ​will​ eventually lose a client or two or five, often through no fault of your own. They may go out of business or their business model might change so they no longer need your services. Keep getting your name out there, whether it be through social media, your own website or word of mouth. Don't overlook the value of LinkedIn and Twitter. Allied Business Academies mentions online freelance exchanges as a likely source for picking up clients, but it warns that the competition on those sites can be fierce.

Of course, the bottom line is that you're doing this to make money. You can sometimes set your own price points after you've established your client base. Checking out those freelancer websites can come in handy when you're starting out, giving you an idea of what others in your field are charging so you know whether your expectations are reasonable.

But you might be told, "We'll pay you $X to deliver Y and Z," depending on the nature of your work. You may or may not have room for negotiation. What you ​do​ have is the right to politely decline the work if you don't want to work for so little money, always assuming that you have other clients on the back burner.

And never assume that a client will pay you $X for a subsequent job because that's what they paid you for the last work you did for them. Always, always make sure in advance so you don't commit to working on a project for peanuts. You might take on two nearly identical gigs for the same company, and the second one could pay five times less than you were paid the first time around.

Never, ever, ever spend your pay before you have it in hand, particularly with new clients. Freelancing is as much about the art of budgeting as it is earning. Yes, you can take on more work to make up the difference if someone fails to pay you, but Poynter Institute warns that this can quickly and easily lead to burnout.

Unfortunately, the luxury of freelancing is going to cost you some money, too. You'll have expenses to meet that the average employee doesn't have to worry about. Marketing yourself can mean money out of pocket, and you might well need supplies of some kind. But those expenses are minor compared to the big ones: taxes and paying for your own benefits, such as health insurance.

Your employer pays half of your Social Security and Medicare taxes when you work for someone else, but you lose that luxury when you freelance. You'll have to pay the full tab on your own. On the bright side, you'll be able to claim a few self-employed tax deductions that employees aren't privy to.

No accommodating employer is going to kindly withhold taxes from your paychecks and send the money to the IRS on your behalf. It's on you to do that, and the Internal Revenue Service wants to be paid as you earn. It expects you to estimate how much you'll owe in income tax and self-employment tax (Social Security and Medicare) and promptly remit that money every three months. You'll pay some nasty interest and possibly tax penalties, too, if you wait until the year ends and you file your tax return.

Some freelancers automatically scrape a percentage off every payment they receive and drop it into a dedicated bank account for taxes so they're not scrambling every three months when those quarterly estimated tax payments come due.

Yes, freelancing does come with a few challenges. But you'll be able to happily work from your lawn chair at 3 a.m. if you know what those challenges are going to be and you're prepared to meet them.