4 Unexpected Freelancing Expenses To Know
If you manage your own business, you understand the financial and emotional risks associated with your initial startup costs, budgeting ebbs and flows, and general marketing methods. Entrepreneurship is never for the faint of heart; it's a dynamic labor of love, one that a person shouldn't do just because they're interested in seeing if they can do it. You need passion coupled with grit, and you need bravery coupled with boundaries.
With that said, there are a few expenses that I know surprised me in my first year of freelancing!
1. Taxes, Taxes, Taxes
One of the best perks of being a freelancer? Getting paid upfront. One of the worst parts? Planning for taxes and strategizing your money. For those who are smart with future planning, this part is easy. If it's an area that you struggle in? You need to realize that the $1000 you just received from that contract is not equal to $1000. Uncle Sam will always come around for his share.
Small business owners can get mauled by taxes if they aren't strategic (which is exactly what happened the first year I started). With that said, there are many awesome small business tax deductions that can lower your bill. I found that hiring a professional CPA to help with tax filing was worth its weight in (financial) gold (pun sort of intended?).
2. Homeowner Costs
All right, so this isn't necessarily part of freelancing, but it can be. I just so happened to purchase a home the same year I started freelancing (no, neither of these were explicitly planned).
In the first year, we had to do a lot of different renovations, as our home was somewhat of a fixer-upper property. And let me tell you: those costs can creep up insurmountably! A roof replacement alone can set you back an entire year of freelance income!
Fortunately, some of these costs can also be tax-deductible. We converted one of our bedrooms into a home office, and since I exclusively use that space to get work done, I can deduct the furniture costs and some of our mortgage. Win-win!
3. Marketing Efforts
So far, I have done my own DIY marketing via self-teaching myself SEO and the basics of digital networking. With that said, it's a large task, and it does some time, planning, and a serious learning curve.
Even if you're the best freelancer in the world, you need a way to stand out from the competition. You need to be able to show people how awesome you are! And, if I've learned anything about this industry, it's that you sometimes get exactly what you pay for.
I know that as I continue to grow my business, I'll probably have to ramp up my marketing efforts and budget. And, it'll be worth it.
Okay, this isn't a required expense that you need to have, but it's one that will hopefully keep you sane and rejuvenated. I work full-time and freelance on the side, and that means that I need to have a way to charge my emotional batteries.
For me, that comes in the form of my gym membership, rock climbing, and travel. I consider myself proudly frugal, but I certainly factor these expenses as non-negotiable- prioritized just as highly as food, mortgage, and utilities. They are what keep me sane and inspired to plug into my work each day.
Nicole is a Licensed Marriage & Family Therapist and professional freelance writer. She is passionate about helping people uncover and unleash their authentic selves (both in her therapy and written work). Nicole enjoys blogging about mental health, addiction, and self-esteem. Check her out on...