Financial essentials
To freelance or not to freelance? That is the question
Freelancing and side hustles are more popular than ever. Here’s how to approach non-traditional work while preserving your financial security.
Summary
Whether you’re freelancing now or thinking about it, here are some important things to keep in mind.
- Figure out why you’re freelancing—to work for yourself? Earn extra cash? This will help you make better decisions.
- Treat it like a business. Track expenses, set aside money for taxes and create a separate bank account for your business.
- Consider a hybrid approach. Keep a full-time role so you can take advantage of benefits, with work on the side to make money or satisfy you creatively.
- Figure out your long-term financial goals. Do you want to buy property? Create an emergency fund? Naming your goals can help you reach them.
- Choose roles that align with your long-term goals.
From side-hustles to full-time freelance: What you need to know
For people entering the workforce, the 9-to-5 isn’t the only path to financial success—it might not even be the preferred one. Over half of young adults say they have a side hustle1, and more than 70% either freelance or plan to.2
From managing social media to designing logos or consulting, young professionals are redefining what it means to earn a living on their own terms. Flexibility, autonomy, and creativity all add to the appeal—but freelancing also brings new questions and responsibilities.
How do you manage income that fluctuates? What about retirement savings, taxes or health insurance? And when does a side hustle become your main source of income?
Here’s how to weigh your options and build financial stability, whichever path you choose.
1. Know your “why” before you leap
Not all freelancing goals are the same. Some people freelance to earn extra cash, while others do it for creative freedom, and some to escape burnout. Understanding your motivation helps you make smarter decisions about which opportunities align with your goals—whether that’s building experience, supplementing income, or launching a full-time business.
Many young adults today are reaching key milestones, like buying a home or securing full-time employment, later than previous generations. Freelancing can serve as a valuable bridge, offering income and flexibility while you learn new skills.
2. Treat it like a business—even if it’s part-time
If you freelance, think like a business owner. Track income and expenses, set aside money for taxes, and create a financial cushion for slower months.
Experts recommend setting up a separate checking account for freelance income and automatically saving a percentage of each payment for taxes (typically around 25-30%). Using accounting tools or apps can simplify this process and save you time.
And remember, just because you don’t have an employer-sponsored retirement plan doesn’t mean you can’t save for retirement. Options like a Roth IRA or a SEP IRA are tailored for self-employed earners and can help you stay on track with your long-term goals.
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Balance flexibility with stability
Many freelancers say that stability remains a top priority—and for good reason. Building a hybrid approach can help: Keep a steady job or part-time role while freelancing on the side. This lets you build income streams without sacrificing security.
If you’ve already transitioned to full-time freelancing, consider building your own safety net. Build an emergency fund and set up recurring retirement contributions to help create stability between projects.
4. Keep your career vision in focus
Freelancing offers freedom, creativity, and endless possibilities—but it also requires planning.
Ask yourself: What’s my vision for this work? What are my long-term financial goals, and does this align? Whether your aim is to scale a business or support your lifestyle, keeping your “why” front and center helps you make intentional decisions and avoid burnout.
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1. The Harris Poll,
2. CNBC,
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.