When I was a child, dreaming about being a veterinarian, I believed that my passion would determine my career. Whatever made me the happiest, I thought, would be the way I spent my days.
By the time I got to high school, a substantial paycheck seemed like the top priority in building a career. Veterinary medicine fell from favor, replaced by business management or marketing.
But in the end, my career path would be determined by the basic necessities of comfort and stability: health benefits and matching 401(k)s, work-life balance and job security. Choosing an occupation involved so much more than just passion and paychecks.
The accidental freelancer
After college, I found my way to data analysis, a career that came with paid vacation time, health care and a generous retirement package. It was a very adult job, with stable hours and a company Christmas party every year. I got promoted quickly, taking on added responsibility while still managing my day to day life.
On a whim, during a dull moment at work, I wrote an email to an editor at a fashion website I followed. To my surprise, she invited me to contribute my first piece about stylish motherhood. In the beginning, it was a hobby. I wrote one piece a week in the evenings after my daughter had gone to bed.
Within a year of that post, I was writing every day. When the company launched a parenting website, my editor recommended me for a contract contributor position. I spent my lunch hours dashing out stories before returning to my day job spreadsheets. At home, the minute I finished dinner, my husband took over with our daughter, and I sat down to type.
It was a difficult time because while I loved writing, I felt guilty about being so focused on my day job. Writing was a passion that I had never considered turning into a profession. It’s one of those unreliable, creative jobs that parents try to lead you away from when you’re a teenager. At the same time, I was beginning to make a name for myself in this highly competitive and rewarding industry.
In 2011, after four months of trying to juggle what had become two full-time jobs, I decided that I had to make a choice. Life couldn’t go on like this.
Work-life balance vs. job security
Writing or data analysis? The decision could have been based on which activity I enjoyed the most. But enjoyment wasn’t on my mind. Instead, I was considering the financial and logistical pros and cons of steady employment over life as a freelancer.
Thankfully, my amazing employers provided financial consulting for all employees. The first order of business was to consider the effect on my taxes. From paying twice the FICA taxes to making quarterly estimates, there were plenty of tax considerations. In fact, my financial planner warned that I probably owed at least $2,000 to the IRS already for my additional untaxed income that year.
Retirement and benefits required an entire other meeting. The raw numbers didn’t even begin to tell the whole story. When accounting for matched contributions to my 401(k), my analysis salary was at least 5% higher than the number on the checks. And that doesn’t even include year-end profit sharing.
Although my daughter and I would be eligible for health care coverage under my husband’s plan, his insurance would go up by a couple hundred dollars a month. For workers who can’t depend on a partner’s employer, the cost of covering your own health insurance can be a huge barrier to freelance work. As Olga Khazan at Forbes warns, “Health insurance premiums are rising, making the high-risk life of an independent worker even more unpredictable.”
Armed with information, my husband and I sat down to discuss the less-quantifiable aspects of my potential employment. Given that he had a steady full-time job in transportation, he would support whatever decision I made. Freelancing could provide the type of flexibility that many working parents dream of. But my data analysis job offered dependable, consistent income, which is a necessity when you’re trying to save for college.
In the end, I chose to accept the inherent risk of freelancing. I worked part-time at my data job for six months, retaining the services of a financial consultant to help with the transition. At the suggestion of my first editor, I began to look at my work as a personal business. I set up invoices, tracked billable hours and saved the receipts from interviews done during my lunch hour.
In the beginning, it was a little terrifying. During my first month as a full-time freelancer, my most consistent writing gig cut back on my daily post count. That month, I made about half of my normal salary. But the situation got easier—my portfolio diversified, and my employment became more steady. My husband and I got used to paying into our IRA and HSA at the beginning of the month, setting aside a tax estimate with each check. And I learned to manage my own time, as well as be in more direct control of my finances.
By concentrating full time on a job I truly enjoy, my salary has increased by 10%, and I’ve diversified my work. Despite these high points, I do miss certain aspects of my old job, like the joint sense of purpose I shared with my coworkers.
A recent episode of MSNBC’s “Up with Chris Hayes” focused on the changing face of America’s workers. It stated that a third of the country is considered “contingent workers,” meaning temp, part-time or contract employees. These workers, they argued, don’t receive the same commitment or support from their companies. One guest even called this growing trend “an inconvenient truth.” They looked at contract work like a problem that needed to be addressed.
In many ways, they had great points. My employers don’t owe me more than a month’s notice before terminating my contract. They don’t pay into my retirement or invest into my training. I’m not a part of their company. But none of that takes away from the work that I do.
As a contract worker, I can demand a higher wage, because I’m cheaper than a full-time employee’s health care plan. I can juggle multiple employers at once. I can manage my time for them in whatever way fits my life best. Once I figured out how to plan my own taxes and savings, it was just a matter of having the fiscal control to follow through.
It’s not always simple, but the payoff is a job that I love and unparalleled work-life balance. In the end, it wasn’t all about passion and paychecks. However, if you have both, it only takes a little more effort to figure out the rest.
Considering quitting your full-time gig in favor of contract work, but not sure if you can afford the risks? SuperMoney can help you to manage your money and make it work.