Thinking about starting a career as a freelancer? Here are the important pros and cons you need to consider before taking the leap.
I have been working as a freelancer since 2017. At that time, I was fresh out of a corporate job, looking for something new to do.
To be honest, I hadn't really given much thought about shifting to a new career path, mostly because I needed a new job ASAP. The first freelance job offer I got was actually offered to me twice — I passed over the opportunity the first time because I still wanted to try another corporate job.
Though that hadn't worked out, I gained some character from that experience. Then when I got offered the same freelance job as a service provider the second time, I took it as a sign to accept the offer.
It was honestly one of the best decisions I made for my career.
Fast forward to when I'm writing this, I have learned several important lessons from my own and others' experiences. These also helped me become a smarter freelance worker.
What You Can Expect as a Freelance Worker
The Joy: You are your own boss
Well, for the most part. It is true that working as a freelancer gives you more freedom over what job you will take on, since it is also more likely that you'll be the one offering your services to businesses.
However, your clients are also technically your bosses because they have the final say. You need to accomplish the work you were hired to do and finish it within the timeline you agreed on. Collaborating with your clients is also essential so you can help their business grow.
So while you can choose whom you will offer your services to, you will also have to comply with your client's requests.
The Disadvantage: You're responsible in fulfilling your own legal obligations
This is something that I don't think a lot of first-time freelance workers realize: Being a freelancer means you'll need to pay for your taxes and other government contributions yourself.
Unlike employees who only see deductions on their paychecks, you actually need to file and pay on your own. This is because freelance workers are considered as contractors and not as employees.
Based on my experience, I only received the following from the companies I've worked with (note that this may vary for each company):
Paychecks (where the deducted withholding tax is reflected)
Tax forms that I use to file and pay for my taxes
Free annual physical examination (company health card not included)
This may be one of the first hurdles you'll encounter, but once you set up a filing and payment system, you only need to stick to them. This will help ensure that you're not overlooking any legal obligation you need to fulfill.
I actually hired a bookkeeper and accountant to help me with tax filing and payments. All my other government contributions are something I take care of personally.
Here are my best tips for you:
Research the legal requirements you need to fulfill to operate your business
Ask your client what they'll require from you as a contractor (some may ask you to submit your monthly official receipts in exchange for tax forms)
Hire / tap trustworthy people who can help you
Keep all the important documents and receipts, both original and photocopy, in a safe place you won't forget
Keep track of when you need to make payments
Keep yourself updated on new government policies, guidelines, and payment schemes that may affect you
The Joy: You can work remotely
One of the best things about freelancing is working remotely. A lot of freelance jobs don't require you to visit your client's office every day like a regular employee. Because of this, you can work anywhere in the world, as long as you've got electricity and internet connection.
But before you plan an out-of-town working trip, make sure that:
You can finish your tasks within the turnaround time
You have everything you need to deliver the work you're expected to do
You're reachable during working hours
You have a stable internet and mobile connection
Remember that having excellent work ethics is a highly valuable trait. This is especially important when you're working remotely, because your client and colleagues aren't around to personally check up on you.
The Disadvantage: You pay for your own consumption and the services you hire
This refers to expenses like electricity and internet usage, rent, meals, transportation, devices, and the people you hire (eg. a bookkeeper or accountant).
Some companies may offer to let you borrow their equipment or if you're lucky, they may provide you with extra allowance for your work setup. But in most cases, you'll have to finance your own needs.
Your own expenses are something you have to consider when setting your rate and accepting an offer. Your service fee should meet all your needs and allow you to add to your savings. It's even more ideal if you still have some money to spare for occasional treats.
The Joy: You set your own work hours
Generally, as a freelancer you aren't expected to clock in eight hours' worth of work a day. This varies depending on your agreement with your client, but employers are often more lenient on freelancers when it comes to work hours.
There's an understanding that freelancers may also be taking on side jobs, so you can't expect them to have rigid work hours. However, you're contract-bound to meet the service-level agreement (SLA).
The need for flexible hours is also partly why some people commit as a freelancer or consultant rather than as an employee. This allows them to do other things within the day, like run errands or work on side hustles.
The Disadvantage: You may be compelled to work beyond 8 hours
This is true if you have much work to do within the day for one or several clients. Sometimes your work may even spill over weekends and holidays.
Remember that you have control over your work hours. If you want to free up some time during the day or week, don't overload yourself. Learn how to make wise choices so you can enjoy work-life balance while providing for your needs.
One of the other disadvantages of working remotely with a flexible schedule is having to battle against procrastination, laziness, and "blocks."
I'd say freelancing isn't for everyone because let's face it, not all of us are great at managing ourselves and our time.
You need to get over your own struggles that may affect the quality of your work. This could mean taking short breaks within the day or finding fresh inspiration. Whatever method you use, it should compel you to get off your ass and get the work done!
The Joy: You dictate your own rates
Being a freelance service provider means you're running your own business. Technically, you are your own business. As such, you also have the power to set your own rate or service fee.
You can base your rate on industry standards for your level of experience. There are sources online that can help you compute salary rates which also take your field and location into consideration.
If you know people who work within your field whether as an employee or a freelancer, also ask for their advice. There's a certain advantage as well to having previous work experience because you can base your rate on your previous salary and negotiate for a higher fee.
The Disadvantage: You risk being underpaid
When you don't know how much you should be charging for your services, you risk being underpaid. You only take what your client is willing to give you, and sometimes that may not be enough to compensate for all the work they ask you to do. We're looking at ad hoc tasks here, and not to mention, the extra stress!
To be honest, it's also quite difficult for me to set a rate on my own. I often use my previous fee as benchmark and negotiate from there.
In retrospect, that also caused me to be underpaid. In one of my freelance jobs, I never got a salary raise, nor a good performance bonus, even though I performed well consistently over the years.
As a freelancer, you most likely won't be eligible for company bonuses and promotions as well. But some employers do offer to absorb well-performing contractors as full-time employees.
You'll learn the ropes as you go, so don't worry about not knowing everything if freelancing is a new concept to you!
The Joy: You can have multiple streams of income
One of the appealing things about freelancing is the ability it gives you to earn through multiple streams. You can take on several gigs at a time to increase your earnings.
For nearly three years I maintained freelance jobs as a service provider and as a content writer. These really helped me save up, allowed me to travel overseas and even help others, and provided for my wedding expenses.
I should warn you, though, that there really is much time and work involved in maintaining two or more jobs at the same time. I often had to work late into the night, during holidays, and sometimes even on weekends, just to meet my clients' requirements.
Though the potential income is definitely an appealing drive, you should still carefully consider the sacrifices you may have to make.
The Disadvantage: You may get clients who don't pay on time
This is any freelancer's nightmare, honestly. Just as you shouldn't take on work you can't deliver, businesses also shouldn't hire contractors if they aren't capable of paying the right amount on time.
Having a signed contract agreement with your client is very important because that's how you'll know which rights you can assert.
If you're encountering an issue with your payment, it's best to make a follow up and raise your concern directly to people who can help you, such as your client or supervisor and the company HR.
The Joy: You can save more
Freelancing can really help you save more. It may sound untrue, because some people associate it with working odd jobs without a stable income.
But when you find the right clients, hustle, and receive fair compensation, you'll be able to earn as much as employees do — or even more! I actually earned more when I started working as a freelancer compared to when I worked as a corporate employee.
Maximizing the fruits of your labor is also a result of good financial management habits. Get practical tips on managing your finances in this article.
The Disadvantage: You can become a careless spender
Truth be told, no matter how much you earn, if you don't know how to manage your finances well, you'll become a careless spender. Just imagine how much you're prone to carelessly spend if you're already earning more.
It's highly important to learn how to budget your money even before you start working. In fact, it's a life skill that everyone should learn. Building a good financial habit will save you not just money, but also the trouble of looking for resources when you need it.
The Joy: You can take on any job
Freelance jobs come in many forms. You can become a virtual assistant, a BPO worker, a content writer, a graphic designer, a marketer...the opportunities abound!
My first freelance jobs weren't something I was already skilled at — I literally learned on the job. However, I did give the interviews and written tests my best shot, so that helped my case.
The ability to take on any job is still dependent on your skill set, your ability to adapt and learn quickly, and your willingness to try new things. If you're not picky, you can definitely wing it until you learn it.
The Disadvantage: You may not be able to hone and master a specific skill
Being a jack of all trades does have its own drawbacks. The most obvious one is the lack of mastery over a specific skill. Sure, you'll have multiple skill sets, but it might be difficult to pin down a specialty.
This isn't a huge disadvantage, because if you really set your mind to it, you can find something to master. But there's no denying that it's easier to hone a skill that you're already utilizing for your job.
Also, switching to different jobs often may send you back to square one every time rather than help you advance in your career. That's something to consider when choosing what type of freelance job you're going to take. Continuity still holds value.
Like any type of job or career path, freelancing has its own joys and disadvantages. Despite the cons we talked about, you can find ways to avoid and overcome the challenges to fully enjoy your freelance career.
Always carefully weigh your priorities, what you'll gain, and what you'll have to give up before you take the leap. Remember: your decision can lead you to either a satisfying or a frustrating career path. Choose what's best for you.