4 freelance problems and how to solve them

Life as a freelancer has many benefits – but also a few problems. Here are 4 of the most common problems and a few ways to solve them…

There’s a lot to like about being a freelancer. You’re your own boss, can work as and when you want, and are in charge of which projects to work on and which to turn down.

But there are also a number of problems that pretty much all freelancers face. Here are 4 of the most common ones and a few tips on how to deal with them…

1. Getting a mortgage
While this one isn’t directly related to your working day, it can be a major issue for anyone who is freelance or self-employed. In fact, a survey from Aldermore found that 68% of self-employed first-time buyers think that getting on the property ladder is difficult and 62% don’t know how they will ever manage it.

For 14%, the biggest hurdle is just being able to secure a mortgage as new lending restriction mean it’s become harder for people without a set regular income to be accepted for a loan.

Speak with a mortgage advisor. Some lenders have different criteria so it’s worth seeking them out. And keep good records of your income for both you and your company if you’re self-employed. A solid business plan can also help.

2. Managing a budget
When you don’t know where your next pay cheque is coming from or how many hours you’re going to be working this month, it can be hard to create a budget.

This is a particular problem for those starting out in the freelancer world, who could go months without significant work.

What also has to be factored in to your monthly incomings and outgoings is the tax bill you will have to pay at the end of the year. Its important to ensure that come January 31st you have sufficient set aside to pay what you owe to HMRC.

Though easier said than done, try and find some retainer work for a company to provide a base level of income – even if you have to compromise on your usual rate it can be worth it to have some regular income.. And when you’re not working on a project, you should be working on marketing yourself.

As for managing a budget, work from your lowest levels of income. If you can work out a way to pay your bills while picking up a base level of work, then you’re in good shape. And when the money does come in, put some side for the quiet months. Pick a set salary you’ll pay yourself – and don’t go over it even if you’ve got a big pay day. Always try to set aside some money every month for tax and National Insurance payments.

3. Taking a holiday
While some freelancers might find themselves with plenty of time to themselves, others struggle to fit on holidays for fear of losing out on money or a client.

But working 52 weeks a year – especially by yourself – can lead to burn out and be bad for business in the long term.

Plan well in advance. Not only will this give you time to organise your workload around your time off, but you might also get better deals, saving you some money.

If you’re on a long term retainer, speak with the client about holiday pay. You might be due some. This article on Freelancer UK lays out the legalities behind it.

4. Lack of support
Finally, one of the big issues about being a freelancer is that you’re often on your own. And while working alone can be tough, it’s the other benefits that you could be missing out on that really matter.

These include no company benefits, lack of company pension, no paid leave and lack of support network companies can provide.

Make sure you’ve got yourself a good private pension and are putting as much in as you can afford. This will help you manage your finances in the future.

For network and support, look up free services that could provide these for you, or whether you’re suitable for any government run schemes. This includes childcare vouchers and free counselling sessions.


Posted by Julie Tucker