The freelance world can feel like the Wild West. You won’t have access to any of the safety nets available in corporate workspaces. If you want to stay stable while freelancing, you’ll have to set up some safety nets all on your own.
Protection #1. Freelance Contracts
One of the best protections you can set up for yourself is a freelance contract. A freelance contract is a written contract directed to your respective client. It establishes the terms of the project that you’re agreeing to, including when it should be completed and how much it will cost.
Why is a freelance contract an important protection? First, a freelance contract will make the terms of your project clear. It should eliminate any miscommunications between you and the client.
A freelance contract is also a confirmed agreement that you will be paid. Unfortunately, one of the biggest problems with self-employment is payment — sometimes clients will pay freelancers late or try to avoid paying them at all. Having a signed contract can motivate the client to follow the terms of the agreement and send your payment in full and on time. In the case that you take them to court over missing freelance payments, the contract will provide strong evidence that you are in the right.
Protection #2. Tech Warranties
Your freelance income may depend on your tech equipment. If your equipment isn’t up and running, you may not be able to get any work done. So, signing up for extended warranty programs could be very useful.
Many extended warranty programs will increase the level of coverage for your tech. Your tech will come with a standard manufacturer’s warranty when you buy it. This warranty will only cover repairs and replacements related to manufacturing defects. It will only be available for a short amount of time (typically between 3 months to a year).
An extended warranty can help you with repairs and replacements outside of manufacturing defects, like water damage. Some plans will also help you manage costs in scenarios like item loss or theft.
If you don’t want to pay for an extended warranty program, you can at least provide some additional protection to your equipment with the help of your credit card. Check your credit card’s extended warranty policy to see whether this is an option.
Protection #3. Emergency Fund
Another protection you should set up for yourself as a freelancer is an emergency fund. An emergency fund is a personal collection of savings reserved for urgent expenses outside of your usual budget.
How does this help as a freelancer? Sometimes, an urgent expense will put your work on hold. Like when one of your tech devices breaks down and you need a replacement in a hurry. Whatever your tech warranty doesn’t cover, you’ll have to pay out of pocket. If you don’t have an extended warranty, you might have to pay for the entire thing. Your emergency fund can help you with that.
Without an emergency fund, you might not be able to afford an urgent expense right away. You may need to borrow funds in order to resolve the problem. You could do that by charging the expense to your credit card and paying down the card’s balance later on. Or you could try applying for a personal loan that’s accessible to your state of residence. So, if you live in Miami, you could search for Florida personal loans and check whether you’re eligible to apply for one. If you’re eligible, you could quickly fill out an application and wait for your results. You just might get approved.
Borrowing funds should always be seen as a last resort. Set up an emergency fund for yourself. You can rely on that as a safety net and a first resort.
Don’t leave yourself unprotected. Set up these safety nets for yourself as soon as possible.