When the unexpected happens. The scary side of freelancing.

As you may or may not know, freelancers don’t really get that security of a company to be able to take things like (paid) sick days, or the luxury of being able to take time off and still get paid for that day.

Employees are paid a salary for the year. How those hours are allocated or used, is another story. Generally speaking, they still get paid, no matter what happens.

Freelancers, are paid generally by the time or the project.

If they don’t work, they don’t get paid.

All the freelancers we know and talk to, make about the same amount as we do, about $20,000 – $30,000 a month.

Of course, if they take lower rates, they make less, so let’s say $18,000 a month at a minimum.

The trick is also getting work for such a long period of time. Our projects are around 2 weeks to 6 months on average.

No one really works a full year unless they’re lucky, and if they work longer than a year, it’s a golden project.

So why am I saying all of this?

I already talked about a freelancer whom I believe is supporting a family of parasites, and though he has not said it, I suspect he is (even now with work), still using credit card debt to fund the lifestyle because he went over a year and a half without working, had zero savings because whatever he made he spent, but worse of all, his family kept on spending what they didn’t have saved.

This is a SLIGHTLY different story than my own (it is now over a year since I have worked), because although I kept spending normally in the past year, I also saved a bit of money (around $90,000) to weather through “famines” like this.

….although I did expect to be back to work fairly soon, I am still able to go at least another year, maybe 2 years before I have to start making some decisions to get a job. I’m working on holding off as long as I can, and I am using my budget to make sure it happens.

Because anything can happen beyond your control.

It has come to light, another story of a freelancer we know who is the sole breadwinner of his family.

He has 4 children, all of whom he pays bills for (they’re all college-age now), such as their cellphone bills, their cars, gas, living expenses, and his wife doesn’t (or can’t?) work.

He has paid for vacations, summers abroad, fancy appliances for the home, fancy cars you name it, he has done it. I even suspect he is supporting extended family members.

His house is still mortgaged (around the $350,000 range I suspect), and he has literally spent EVERY. SINGLE. PENNY. he has made in the past 5 years of FULL-TIME freelancing (that golden contract I talked about).

It is not normal as one might suspect in our line of business, to pay for our house in cash as we did, considering the amount of money we make as freelancers.

If we conservatively estimate it, he has made over a million in 5 years, and spent every penny.

Every.

Single.

Penny.

The trick of course, is not just to make a lot of money, but to SAVE IT as well.

Why am I telling you all of this?

… it’s because now he’s sick.

He has to go in for some major treatment for his disease over the next year, which takes up at least 3 days of the 5-day workweek, not to mention recovery time.

His plan was to still work through the treatment but he was obviously dreaming because for every day he goes in for treatment and doesn’t come in to work, he doesn’t get paid.

He is going to literally work himself into his grave.

At this point, if you had money saved like we do, you’d stop working and concentrate on getting better to live another day so that you can keep working.

Well… he can’t stop because if he does, his world stops spinning.

We freelancers generally don’t take EI (Employment Insurance), because you have to pay into it, and unless you plan on taking at least 2 years off (usually maternity leave for mothers for at least 2 children), it is not worth the yearly cost by our calculations.

Once you start paying into EI, you can’t stop, and in about 40 years, it isn’t worth it.

Of course, you can’t plan for things like this either.

He cannot stop working, he would be finished.

He needs that income because he has bills to pay and not a shred of savings.

Once he stops working and stops bringing in money, his house will be gone, his things, his whole lifestyle, everything.

I have no idea what he is doing to prepare for this eventuality, but I am hearing he is still spending $1000 on fancy things (denial), and still not budgeting & tracking his expenses, not to mention the immense pressure and stress he must be under.

You need to prepare for these things

Not only is our house paid for, we are also both freelancers who understand the sad (I have a heavy heart writing this) importance of savings.

I may bitch a lot and now feel like I have no money at all because of the dry work situation, but it is really nothing compared to other people’s situations.

I have spent a lot of time thinking about this, and thinking (worrying) about them. I know it sounds stupid because it is not my family or my partner, but … it could be.

We were both quietly talking about them last night, and we both agreed that we were very very lucky in that we are both money smart, we both make good money & save it, and we are healthy for the most part although this brain thing I have is worrying me.

You may also have a spouse like we do, who would step up and take over the bills.

I told my partner last night:

If this was you, I’d take over all the bills if I had to, no questions asked, even if you could never work again.

And he would do the same.

Sure, we’re in a 50/50 relationship for money which is controversial to many, particularly since when I got pregnant and was on maternity leave I physically couldn’t work, but we’re also partners in the truest sense of the word.

I am hoping his wife and his kids step up to the plate. We shall see.

You just can’t control everything.

You can save money and hope and help the situation like we have managed to do, because no matter how much you make, people on the whole as I have discovered over the years in my own spending habits and in these stories, have a terrible time learning how to manage it.