Can Freelancers Achieve Financial Freedom?

on February 14, 2011 in Self-Employment

Don’t let stereotypes fool you. Financial freedom is not about being rich. In fact, you could be a millionaire and still be a financial slave. You know you’re financially free when you’re not worried about money anymore. The path to financial freedom isn't much different for freelancers. I'd even say we have the ability to get there faster by making certain business choices. So how do you get to financial freedom?

By Being Debt-Free

Financial freedom requires you to be debt free. Which is why I want to pay off my student loans even though some financial gurus say I should do otherwise. (Check out the comments on this post for a little discussion about that.)

Debt keeps you from reaching financial freedom because it’s something you must pay if you don’t want to face dire consequences. Missing payments on your debt leads to increased fees and sometimes increased interest rate, blemishes on your credit history that keep you from borrowing money in the future, and you even risk being sued and having your wages garnished or bank account levied. Bad things happen when you don’t pay back your debt. To me, that spells financial slavery.

Having Savings and Investments

What would happen if you were in some type of accident and weren’t able to write for several weeks or months? What would happen if your biggest client dropped you? What if your computer crashed today and you had to buy a new one? There are an endless number of what-ifs that could come manifest at any given time. Sure, we take steps to prevent them from happening, but financial freedom also includes having the means to get through these crises without creating additional debt.

Financial freedom today doesn’t mean financial freedom tomorrow. At some point in our lives, we’ll all want to retire from successful careers in freelance writing. What will you live on when you retire? Social security isn’t guaranteed and if you’re not paying taxes on all your income, i.e. getting paid under the table, your social security income may be limited. So it’s important to put money aside for the future.

The Ability to Live on Less Than You Earn

The closer your expenses are to your monthly income, the more likely it is that you’re living from paycheck to paycheck, not able to put something away for a rainy day much less for the future. Living below your income gives you some extra money complete the other steps to financial freedom – paying off debt ad saving for retirement.

Generally, you can increase the gap between your expenses and income in two ways: decrease what you spend or increase what you make. As a freelance writer, I like having the ability to increase earnings. I don’t have to wait for a performance review or wonder what percent I’m getting this year. I decide when and how to make the change and do what it takes to make it happen.

Financial freedom can mean different things to different people. What’s your definition of financial freedom?

Thanks for sharing!
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LaToya Irby is a full-time freelance writer and a graduate of the University of Alabama. She primarily writes about personal finance, freelancing, and other self-employment topics.


  1. Peter Bowerman February 15, 2011 Reply

    Good stuff, LaToya,

    I feel very fortunate that thrift and living below my means is something that was instilled in me from a young age. Yes, like a lot of people, I got myself into debt trouble many years ago, but it was sobering enough that I resolved from that point forward to never be in that position again. Other than about 2 years left on my mortgage (and a low one at that; I mean, how much house do you need?), I have no debt, and I like it that way.

    Had an unprofoundly profound epiphany a few years back that went something like this: the lower your monthly obligations, the more mobility you have in life. The more freedom you have to go in new and different directions without your first question always being, “How can I do this and still make my huge monthly nut?” And LaToya’s absolutely right that you can be a millionaire and still be a financial slave if your income is less than your “outgo.”

    A final comment about saving for retirement. I say the key to saving is setting a framework for success. Translation: setting up systems that make savings automatic. Up until about 15+ years ago, saving was a haphazard thing for me. I put aside if I had some extra, but it wasn’t a commitment. Then I made one small, but powerful change: I had a meeting with a financial planner, and set up a system for monthly payments into an investment program. Part of it I write a check for and part of it is automatically deducted from my checking account each month (even better).

    And when you do that, a funny thing happens. Not only do you start doing it regularly, but after a while, you look at that monthly payment just like any other monthly obligation. I consider it a bill just like any other bill. And that’s when it becomes automatic. And while I know that, if I don’t pay it, no collection agency is going to start harassing me, it doesn’t matter. I still do it without thinking, and I don’t even think of it as money that’s accessible to me. As far as I’m concerned, it’s not.

    And I don’t care if you don’t have much left over each month – you probably have something. Be realistic and commit to something manageable, even if it’s only $50 (but obviously, more is better). Over time, increase it as you can. But the key is the habit you’re establishing – the automatic don’t-even-think-about-it aspect of it.


  2. Carol Tice February 15, 2011 Reply

    Well, I’m still working on some elements of this, like staying totally out of debt…hard when I’m the sole support of a family of five!

    But I think of myself as financially free in that my debt is quite manageable, I do have some money put away for retirement and for my son’s college, and I make enough that I was able to encourage my husband to quit his job recently and start his own business. That has improved our quality of life so enormously!

    • Rebecca Garland February 15, 2011 Reply

      I’m on the other end of this. I’ve been the sole support (or almost sole support) for a bit too long and my husband just went back to work after a big part of his business online failed. I’m so excited to get his first paycheck and get back on track to financial freedom.

      Being a teacher, I have the added benefit of having that retirement package available, but I save (or will again soon now that I have help with some bills) for additional retirement as well. My goal is to be financially free to a certain extent in a few years – own my car outright and be on track to pay off the house before I turn 45 (I’m 31 now). That way I’ll be almost free once the boys are off at college (43/45) and have a nice TOTALLY FREE living once I am able to retire around 52 or so from teaching.

  3. If you think about it, a copywriter will never be ‘financially’ bound..he may be working day in day out…but that’s his choice. If he lives everything, he still is a MILLIONAIRE..

    And that’s where we WANT to be.

    We want to not care about money, as in NOT that we accept ourselves as bum on the street but know that we have a million cash in the bank, so nothing to worry about.

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