Should you give up your paid job and go freelance in 2024?

As the new year begins, people face a variety of financial decisions. And one of the decisions you may be struggling with is whether to continue working as a salaried employee or enter the world of freelance work on your own.

Although there are many benefits to being self-employed, there are also some drawbacks to consider. If you’re seriously considering freelancing in 2024, ask yourself whether it’s a good idea by asking these questions:

1. Do I have enough money saved?

When you become a freelancer, you give up a steady paycheck. In return, if you sign up for variable income, you may end up with no income for months. If you’re thinking of working as a freelancer, check out a savings account.

Generally speaking, it’s a good idea to have enough money in the bank to cover three to six months of essential expenses. This is your basic emergency fund. However, if you want to work as a freelancer, it’s a good idea to save beyond that point in case it takes you a while to find work, or if you start off strong but struggle.

2. Can you afford to pay health insurance premiums?

When you work as a salaried employee, you often receive subsidized health insurance. One of the biggest costs you can incur as a freelancer is having to pay for your own insurance.

Now, the cost will depend on factors such as age, location, and the type of health insurance you choose. But to give you an idea of ​​how much you’ll end up spending, Forbes reports that the average monthly premium for a Bronze Marketplace plan (the lowest tier you can buy) is $420 for a 40-year-old.

That cost increases to an average of $549 per month for the Silver plan and $713 for the Gold plan. However, these figures do not include subsidies that could offset costs.

Of course, if you’re married, your insurance may be cheaper because you may have a spouse who can get health insurance. But if not, see if you can adjust the cost of purchasing health insurance on your own.

3. Would I suffer without paid vacation?

Another great thing about working for an employer is that you’re usually entitled to paid vacation. For example, you do not have to work on national holidays.

If you’re a freelancer, there’s no such thing as paid vacation. Rather, you should build that time into your schedule. But that’s not always easy. Also, consider that if you have children, you may run into problems if their school is closed for the holidays but you have to work because you are not entitled to paid leave.

4. Will my quality of life really improve?

Many people convince themselves that freelancing will help them improve their quality of life. After all, you can set your own hours and create your own schedule. This might mean you can go meet your kids at the bus stop instead of hiring a babysitter, or you can go home and walk your dog at lunchtime instead of paying for a dog walker.

But while freelancing can improve your life in some ways, it can also make it worse in other ways. If you’re constantly worrying about money because of inconsistent paychecks, that’s not a good way to live. And if you never make time because you feel pressured to accept every project offered, that’s not good either.

By 2024, you might be thinking seriously about going freelance. But think about whether the freelance lifestyle is actually right for you and your finances. A better way is to talk to people who are already living that life and get their opinions. This will give you the insight you need to make the right choice.

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