Welcome to Taking Stock , a space where we can take a deep breath and try to figure out what the COVID-19 economy really means for our finances. Every month, personal finance expert Paco de Leon will answer your most difficult, emotionally charged questions about money. This last two years have forced many of us to reprioritize our finances, and there’s no clear road map for getting through the pandemic yet — but Taking Stock is here to help us figure it out together.

Last time, we spoke with a reader about what it’s like to feel financially secure as a self-employed freelancer with sporadic paychecks. This week, we heard from Refinery29 readers about their own experiences (both good and bad) managing their income as a freelancer.

Megan, 28 — Massachusetts

Megan has been working as a freelance book publicist for around four months now. “I decided to go freelance after working at a very expensive book publicity agency. I realized that the only people who could afford to hire a publicist are those that are independently wealthy, like CEOs, or have an organization behind them, which creates a barrier for most authors,” she tells Refinery29. “The ones I especially like to work with — academics, journalists, artists, etc. — don’t have the resources to hire expensive PR and marketing firms, so I charge less.”

Even though Megan’s services are less expensive, she says she’s actually making more as a freelancer than she was at an agency. “I didn’t leave my salaried job until I had a very comfortable cushion under me in a savings account, which meant that for around six months, I was basically working two full-time jobs: my salaried job at the agency and my side hustle that I eventually turned main hustle.”

This year, Megan’s freelance income is close to $130,000. “Right now, the biggest must-do for me is paying my taxes quarterly,” she says. “I have started an engagement with a financial planner, though, as it’s harder for me to visualize long-term planning now that I’m freelance.” She says that the most difficult thing about managing her income as a freelancer is organizing her savings for retirement and splitting expenses with her spouse. “We had a tried-and-true system for many years that has proved incapable of adapting to my freelance pay, so we’re working it out,” she says.

“I’m only 28, so I have lots of life ahead of me,” she says. “That said, these past four months have been the happiest, least stressful of my life since graduating college and starting to work full-time eight years ago, so I can’t imagine going back to an office environment where I didn’t have the freedom and flexibility I have now.”

Haley, 27 — Pennsylvania

Haley couldn’t find a full-time position after graduating college, so she turned to freelancing and has been doing it ever since — mainly because of the freedom and flexibility it gives her. “My business is classified as an S-Corp so I pay myself a regular salary that comes to about $1,100 every two weeks after taxes,” she says. “This is a figure I’ve worked with my accountant to calculate so that everything is above board come tax time. I take distributions on a quarterly basis based on business profit for that period, and those can range from $500 to $2,000, depending on what business has been like that quarter.”

“I work with an accountant to make sure that I’m categorizing everything correctly and my taxes are squared away each quarter, but I’m also super involved in my bookkeeping,” Haley says. “I meet with another friend who owns their own business each Monday for a money date where we categorize our transactions, project future months, and make sure we’re on track with our spending and sales goals.”

Haley has emergency funds for both their personal and business accounts, and typically works with clients on a per-project basis where the pay can range from $800-$4,500. “This year I should do $75-$80,000 in revenue and I’ll take home about half of that after taxes and other business expenses,” they say. “I’m really fortunate to share most of my expenses with my partner, so even though my take home pay is lower than I’d like, I’m able to cover the necessities and have a little bit of wiggle room for fun stuff.”

“I’ve always been really proud to support myself from my freelancing business, and have never faced a situation where I needed to borrow money from my parents […]

source I’m A Freelancer, & I’m Really Bad At Saving. Here’s How I Manage My Money

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