Some surprises are nice: surprise birthday parties, surprise gifts, surprise breakfast in bed. Other surprises are not so nice, specifically surprises that cost you. When you’re a fulltime writer, your income fluctuates often, so surprises are typically unwelcome. But they happen, even to the most experienced writers. Success and longevity hinge on your ability to manage these surprises.
A big project falls through. Not every lead will turn into a client. It can be very disappointing when it’s a big project, especially one with a big payout. Not that we’re chasing dollars, but there is a certain degree of excitement over a project that pays a lot. With some projects, you can sense a lack of complete commitment on the client side and you caution yourself not to depend too much on the project. Other project cancellations may come as a complete surprise. Either way, try to not to base your budget on a project that you haven’t been paid for.
Insurance premiums or other expenses go up. You may try hard to minimize your monthly expenses to make it easier to survive comfortably on your freelance earnings. Meanwhile, your businesses raise their monthly premiums and other rates and ultimately your cost of living. Unfortunately, it happens every year. You can respond by cutting other expenses, by raising your rates, or by taking on more client work.
A client breaks up with you. Losing a client is unfortunate and sometimes they don’t give much notice. Don’t cry over spilled milk, as they say. Instead, focus on your effort on replacing that client and the lost income quickly.
You owe taxes this year. Ideally, you pay enough estimated tax throughout the year that you won’t owe the IRS when tax time comes around. However, there may be years that you end up having to pay a little extra when you file your tax return. You may have the money in savings, but if you don’t you can typically pay within 120 days of filing your return without having to make arrangements. Otherwise, you can set up an installment agreement and pay your tax in monthly installments. (Make sure you consult with a tax professional!)
Your computer dies. Our computers/laptops are probably our biggest assets. I know I can’t work without mine. Depending on what model you have, it could cost several hundred dollars maybe even more than a thousand dollars to replace it. You’ll generally have to replace your computer every two to four years. If you start saving now, you’ll have the means to replace your computer when the time comes.
Financial surprises are a certainty in the world of freelancing. Sometimes they're as unexpected as an earthquake. But, with a strong financial foundation, you can keep these big surprises from devastating you.