Overcoming Uncertainty: Freelancing to Financial Freedom

Financial freedom is a life goal for many people. It means you get to make life decisions without being overly stressed about the financial fallout of those decisions.

Sounds too good to be true, almost. But it is possible and unlike what those internet gurus promise you, you don’t need to start a scammy business to make it happen.

The better alternative? Freelancing. But, I’m guessing you already know that and that’s why you’re here—wondering how freelancing can help you achieve your financial independence goals.

Freelancing isn’t a way to get rich quick. The good news, however, is that freelancing your way to financial freedom is certainly an achievable dream.

It can feel scary and uncertain but taking the right steps toward this goal can help you make your dreams come true. To help you get started, in this guide we’ll discuss two main things:

• How to overcome the fear of uncertainty
• Financial tips for freelancers

Let’s get started.

How to overcome the fear of uncertainty

You’re not alone. Freelancers and entrepreneurs everywhere may feel crippled with the fear of uncertainty when they’re first starting out with a new venture. It’s normal, but don’t let it hold you back from pursuing your freelancing dreams.

Here are three tips to help you “feel the fear and do it anyway!”

Face your fears with knowledge

If you’re having doubts about becoming a self-employed freelancer, that’s OK. Most new or wannabe freelancers worry about the same things—inconsistent income, lack of job security, or stability.

The truth is many of the financial fears surrounding freelancing are based on myths or old-school beliefs. What’s the actual reality of freelancing then?

Upwork’s Freelance Forward survey found that freelancing continues to grow as a viable career choice. In 2022, 43% of all Gen-Z and 46% of millennial professionals freelanced.

Want more facts? The survey also found that 77% of freelancers feel optimistic about their personal income and salary increase for the coming year, and 80% are optimistic about future job opportunities.

Similarly, a majority (61%) of freelancers say they make as much as or more than they would for a traditional employer. Overall, 69% of freelancers expect their income to increase in the coming year.

This optimism may be due to the fact that 68% of freelancers have more than one employer, job, or contract project. With this diversity of income, there is less reliance on a single employer than those with a full-time job feel.

The reality is, freelancing provides many professionals with greater opportunities and satisfaction in their careers. So the next time you’re feeling fearful about freelancing as a career choice, remind yourself of these facts.

Seek inspiration from success

Overcoming the fear of the unknown is often easier when you can see others who have succeeded before you. Do you know any freelance business owners? Ask them about their journey. Even without going into the details of their finances, they’ll be able to share with you how they overcame their own financial uncertainty.

Don’t know any freelancers? No worries. Take a look at some of these success stories where independent professionals share their personal journeys and what it took for them to find success.

For example, graphic designer Zsuzsanna Papp shares how she moved countries, started a family, and established a successful business—all at the same time. Meanwhile, 3D visualization artist Anna Nutsubidze shares her experience of starting a business and working with clients from around the world, while based in Tbilisi, Georgia.

AI and deep learning expert Richard Alexander started his freelancing business while still working full-time and shares how he made the transition over time. Javiera Alfaro began freelancing to earn extra income outside of her full-time job. Today she travels the world as a digital nomad.

Real freelancers achieving real success in the real world can be very inspiring when you’re feeling unsure and need some reassurance.

Take action

A big part of the fear of uncertainty also comes from the fear of the unknown. Many aspiring freelancers hold back because they simply don’t know how to get started. So this means the quickest way to overcome your fear is to take action.

Start small as a new freelancer. As you gain momentum you’ll also gain experience and confidence as a result.

Wondering exactly how to start freelancing? Follow these steps as a basic guideline.

1. Identify your niche skills

Start by determining your existing skill set. Turning your skills into a service is the first step to becoming a freelancer. To do this, you’ll need to understand how your skills can help a prospective client. Make note of what capabilities potential clients are looking for and assess how your skills can fill the gap.

2. Set up your freelance business

Don’t complicate this. You don’t need much to start freelancing. Create a basic freelance business plan to get started. Start simple by creating a high-quality Upwork profile. You can create a website and LinkedIn profile next.

Put together a portfolio of your work to showcase your work achievements. This may be small to start with but you’ll continue adding to it as your business grows. Check out 4 Ways to Create a More Successful Freelancer Portfolio for advice.

3. Get your first client

With your online presence up and running, it’s time to start looking for clients. For many experienced professionals, word of mouth can often bring you your first few clients. For others, Upwork is a great place to get started and find freelance work.

Find a project you feel confident about delivering great work for and submit a proposal. Keep your proposal short, friendly, and professional. It may take some trial and error but keep at it until you get that first client under your belt.

4. Start building a client base

Successful freelancers establish relationships with clients rather than thinking of the work as a one-and-done deal. Building a long-term partnership can lead to repeat business and new client referrals.

Make the most of these referrals. Plus, use Upwork, social media, and other marketing methods to build your personal brand and continue growing your business.

The above is a basic gist of what it takes to get started with your freelance business. It requires work, but from personal experience, I can confirm it’s not impossible. The most important thing is just to take action on your dreams.

While being a business owner may seem scary at first, it soon becomes liberating. You realize you have complete control over the work you do, the schedule you follow, the clients you work with, and of course, your finances. Embrace this.

Financial tips for freelancers

One of the biggest financial hurdles wannabe freelancers struggle to overcome is saving and planning for the future, for long-term goals such as retirement.

When you have a full-time job, saving for retirement is often facilitated by your company. This helps employees feel a sense of financial stability as they’re securing their future. As a freelancer, you usually don’t have an employer helping you with retirement plans, so how can you find the same kind of financial security?

To be honest, it starts with a shift in mindset. You have to start thinking differently about your money and what financial stability and financial freedom actually mean. These concepts may be different from what you grew up believing.

The tips below will help you take a fresh approach to your finances as a freelancer and hopefully, help you overcome the financial uncertainty once and for all.

Set financial goals

First things first, set yourself some financial goals. As an employee, saving for retirement can almost be on autopilot. As a self-employed freelance business owner, you’ll need to take charge of your savings to make sure you have enough money for any short-term emergencies as well as long-term needs such as retirement.

Make it a must to save toward your different goals each month.

Start saving for an emergency

In this Upwork Community blog post about becoming more financially productive as a freelancer, community manager Elonah Jade B advises setting aside some money from your monthly cash flow. “Regardless of whether you have a short-term or long-term project as a freelancer, it's essential that you take a portion of your earnings and put it away in case of an emergency.”

Set up a separate bank account for this so you know exactly how much you have in savings. Elonah’s advice is to “do this through an automatic transfer from your checking account into a savings account every month on the same day, such as the 15th or 30th. This way, no matter what happens with your finances over the course of a month, at least some of it will go toward building up enough savings for emergencies, major purchases, etc.”

If possible, start creating this emergency fund even before you quit your full-time job. Having some savings to fall back on can act as a “cushion” and help you take the leap into full-time freelance work.

Set a retirement target

Retirement isn’t just for employees. If you want to retire comfortably from your freelance career one day, you need to plan for it and then work toward achieving that goal.

Say you want to retire when you’re 50. Think about how much money you’ll need for that to actually happen. Look into retirement plans for self-employed people and set one up for yourself.

If you have a retirement goal that you actually work toward, you’re much more likely to reach it vs. just having a vague idea of retirement in mind.  

Establish and maintain a business budget

Running a business comes with its own set of expenses. When you become your own boss, it can be tempting to spend money on all the new and flashy things. But, a truly sustainable business needs a budget.

Establish a business budget early and stick to it. In the early days, spend only where absolutely necessary and try to run your business as lean as possible. As your cash flow improves, you can certainly spend more on tools or professional development if you feel it’s necessary. However, always keep an eye on your budget to make sure you’re not spending more money than you earn.

Invest what you save

Of course saving for emergencies and retirement isn’t the only road to financial freedom. Once you know your monthly expenses—personal and business—set up a personal budget. Keep track of all your expenses and savings.

As already discussed, some of these savings will be going toward a self-funded retirement plan. You can also choose to make other financial investments. When done responsibly, investing is a great way to grow your money.

The investment approach you choose must be in line with your own tolerance for risk and your financial situation.

Freelancing enables FIRE

As mentioned earlier, as a business owner, you’ll probably need to change your mindset about money, retirement and what it really means to achieve financial freedom.

Traditionally, it’s always been about working hard, saving money, and retiring around the age of 65. But many are now pushing back against this with the FIRE movement. FIRE stands for Financial Independence Retire Early.

The basic gist of the FIRE approach is to spend as little money as possible in order to save the maximum amount you can. The end goal of course is to retire early with plenty of retirement savings to fall back on. Many FIRE participants aim to save and invest 50% to 75% of their income.

This could mean living very frugally and reconsidering what is truly essential and only buying what you need. This could also mean thinking of alternative income streams or setting up opportunities for passive income so you can maximize your earning potential.

For example, if you’re currently working full time, becoming a freelancer on the side can be a great way to make extra income that will help you meet your aggressive savings goals. Once you transition to freelancing full time, you can still continue to save aggressively to stay on track with your FIRE goals. Similarly, some FIRE participants invest their money to maximize their passive income returns and create more opportunities to meet their savings goals.

‍While it’s not necessary to go this extreme in your savings, you can learn a lot from the methodology about ways to automate and maximize your savings.  

Freelancing to financial independence

Yes, freelancing can seem scary from the outside. While it’s more mainstream than ever before, it still seems to bring an air of uncertainty with it. But, working a full-time job isn’t always a sure thing either. In an economic downturn, we often hear about hundreds of people being laid off from what they considered secure jobs.

Instead, setting up a freelance business with multiple client income streams could in fact be the answer to a more stable and secure financial future for you.

Many independent professionals—myself included—started freelancing as a way to achieve financial independence. It’s a realistic and very possible dream. You just have to fight the uncertainty with facts, knowledge, and action.  

Ready to take the leap? Sign up for Upwork to kick-start your freelancing journey to financial freedom.