12 Disadvantages of Being Self Employed As a Freelancer

Last week my parents were in town. Because I’m the most (dis)organized person ever, I’d taken on more writing assignments than I could possibly finish before they got here.

Instead of hanging out with my parents and showing them around a town which I arguably know hardly anything about since I barely get out myself, I was typing up financial product reviews.

This week, I’m trying to get back on track, but I’m finding it difficult. I should have been typing like the wind to get ahead on my assignments due before my move next month. Instead, I spent the afternoon watching movies while splayed across the couch like a flattened cardboard cutout and snacking on banana bread. No matter how hard I tried, I couldn’t get up the momentum to write.

Normally I like freelancing.

I can get up and go work out in the middle of the day if I want. I can spy on our weird downstairs neighbors who discuss chakras on our porch mid-day, and contemplate dropping eggs on them (whoopsie! I’ve got such slippery fingers!). I can make friends with the weird old man who sunbathes by the pool every morning and whom I strongly suspect is actually a grizzly bear.

But weeks like this? This is when I question my sanity in choosing this career (even though I was sort of forced into it). And it’s not the only disadvantage of being self employed, or of freelancing.

Health Insurance Is a Bitch

One of the first things you find out as a young padwan freelancer is that the health insurance and medical industry hates you and wants to steal all of your money. There are no good health insurance options for freelancers unless you are lucky (unlucky?) enough to not earn very much and qualify for ACA credits.

Once I started earning more and lost my ACA credits, health insurance for me and Zach was going to be around $900 per month — almost as much as we pay for rent.

Fuuuuuuuuuuuuck that.

Instead, we opted for an only-slightly-discriminatory health sharing ministry. Despite my reservations with the program, there’s no way in Hell I was working so hard to see my money pissed away back down to levels where I would have been eligible for the healthcare credits anyway if I hadn’t of taken on the extra work.

Hopefully soon in the future I’ll be relying on what thousands of other self-employed people choose for healthcare: a spouse who has a job with a full benefits package.

Saving for Retirement is Harder

Speaking of benefits. You know how a lot of employers offer you a nice 401(k) with matching contributions? Guess how much freelancers get.

Nothing.

Perhaps it’s not surprising.

Freelance benefits packages come with all the hopes and dreams of a lump of coal that someone scraped out of a barbecue pit after a fun fiesta.

It’s true; self employed people do get to open a SEP IRA. If you earn a metric shit ton of money, you can even save more in a SEP IRA than you can in a 401(k). But for most people just trying to make ends meet, this can be a big blow to their retirement savings.

You’re Responsible for Your Own Work

If Zach got a nickel for every time I joke about what a dick my boss is…he’d have the same amount of money since it comes from the same bank account.

Seriously, though — this makes sense, right? You’re self employed, you get paid based off of what you create.

Until you realize what the implications of that are.

If you don’t earn very much, it can be easy to end up in a spiral of shame and self-doubt. And like it or not, pure luck plays a hell of a lot bigger role in people’s incomes than we give it credit for. You can work your ass off until it…well…literally falls off, and if you didn’t choose the right path, you could still end up living in a cardboard box.

On the flipside, if you are lucky and choose the right path, it can be easy to get too high of an opinion of yourself and think the sun shines out of your ass. Just look at almost any of the self-help gurus.

You Need to Have Mad Personal Budgeting Skills

You have a business budget…right? Right??

Well, you’ll need some pretty high-falutin’ budgeting skills in your personal life as well in order to deal with an inconsistent and spotty income.

Some freelancers work on a retainer model or are guaranteed the same amount of work every month. Most freelancers, however, patch together their income from a small army of projects, with a logical planning process that would make even the Romans proud.

Still, having an income pattern that looks like a drunk accountant named Mr. Jiminy punched in your numbers is more common than not, and you need to be prepared to handle it.

You’re Alone

Unless you want to shell out for the privilege of a co-working space to be around the nefarious coworkers you thought you were trying to get away from at first, chances are you’ll be working alone.

In your apartment.

With your dog staring at you the whole time.

My coworker in her office.

Some people really struggle with this aspect. If you have depression, it can be even more isolating and make things worse.

I’m as antisocial as they come. I once moved from northern Michigan to the middle of Alaska because there were too many damn people in Michigan. True fact. But even I find that cats are pretty shitty conversationalists, and besides, I’d like to practice speaking French once in a while to something other than the robots on Duolingo.

In short, I miss being around actual people. Fifth-grade Lindsay would probably like to punch me now. You’re welcome.

You Have to Learn to Run a Business

Oh, so you’re a good graphic artist?

Hope you paid attention in math class because you’re going to get a whole new education in how business finances work.

It’s not enough just to have skillz in one area. You need to know how to run your business effectively too.

That means, for example, people making yarn patterns should not buy all the fancy $30 skeins of yarn in the store only to make a handful of $5 sales. Ask me how I know.

You Have to Pay Your Own Taxes

Speaking of business skills, one area that seems to catch people off-guard a lot is income taxes.

You don’t see them when you’re an employee, but trust me, you still pay them. And when you start working for yourself, you’ll need to pay them on your own income.

They’re not as bad as they sound (usually), but you do have to have a plan to deal with them. It’s just one more small disadvantage to being self employed.

Related Post: If I Start Freelancing, Won’t I Owe Like a Bazillion Dollars in Freelance Income Taxes?

Buying a Home Can Be More Difficult

Buying a home is tough. Buying a home when you’re self employed can be tougher than chewing a mouth full of wasps.

For regular people, most lenders will look at your past 6-12 months’ worth of income and you current employment situation. Banks view self employed people as more risky, on the other hand, and so they can require two years’ worth or more of financial statements.

If you are lucky enough to have two years’ worth of income under your belt, you’d better hope they’re good years. In my first year freelancing (part time), I made just under $11,000. With an income like that to judge things on, I could probably qualify for a square of land and one of those plastic PVC forts they sell for kids.

Work/Life Balance Becomes a Myth

Even if you opt for a shiny coworking space, let’s be honest. There’s no getting away from your work.

If you run a blog on the side like I do (a commonly-touted but perhaps errant side hustle), you know that there’s never not something you could be doing right now.

In fact, why are you reading this right now, when you could by studying up on the latest Instagram strategies?

Trying to figure out the Rockstar Finance secret sauce?

Networking with other bloggers?

Tweaking your email copy?

Planning ebooks?

Guest posting?

GDPR?  

It never ends. Just when you think you might like a little down time to read a book, you get a pang of guilt because you could literally be making money right now. (I just ordered the French version of Game of Thrones. Because fuck you, work! You don’t tell me what to do! Oh wait…that was me…)

Paid Time Off Starts to Sound More and More Like a Glorious Fairytale

Your employed friends like to grumble about being slaves to the Man. But once every year, for at least a brief two-week period, something magical and beautiful happens.

Your friends get to go on vacation.

And still get paid.

For having fun.

You can still take time off as a self employed person. In fact, you can take unlimited time off. You just won’t get paid for it.

And no landlord I know accepts exotic vacation photos as payment.

Instead, if you want to take a vacation as a freelancer, you have two options: 1) Dig yourself into the ground trying to work ahead so you have enough income to hold you through your “unemployment,” or 2) Work while you’re on vacation.

Neither are very much fun.

You Have Few Rights

Remember OSHA? Unions? The U.S. Department of Labor? Entire institutions built upon protecting the rights of people from being stomped on by the man like a tin can?

Yeah. None of those give a shit about you since you’re technically your own boss.

Your clients are completely free to discriminate against you and hire someone else if you’re a person of color, LGBTQ, a woman, a man, or just because your name is Bob and they don’t like Bobs.

There’s been some progress made in recent years (like with the Freelance Isn’t Free Act in New York), but still, you lose a lot of protections if you decide to become a self employed person.

There’s No Career Training for This

“Freelancing” is about the last thing you’ll ever find a course for in college. It ranks right up there with underwater basketweaving and spaghetti skydiving.

In fact, when I was in high school, my current occupation didn’t even exist. (Insert rant here about kids these days pulling up their pants, rotary-dial telephones, and VCRs)

That means that just about everyone — and especially people working online — need to stay adaptable above all else and not necessarily cling to the specific skills you learned in school. These skills may fade (fuck I spent a lot of money to get those skills), but knowing how to learn and taking new opportunities as they come is the biggest thing that’ll help you.

And while that is something you can learn in school if you’re open to it, it’s not an express class you can take.

What other disadvantages of being self employed or freelancing have you found? Leave a comment below!