A recent thread on Reddit traced that professional creatives often have a pretty tough time.
If I were to go back in time and give any sort of advice to my younger self when I first quit my day job to run The Phoblographer full time, it would have involved a whole lot about money and personal health. Luckily, I don’t seem to be alone as a recent Reddit thread echoed the sentiments of many other freelancers in the US. For all of us, it seems very grim because of how our system works. And in general, it’s easy to say that a lot of us are often pretty scared of the things that those with full time jobs don’t even think about yet complain about to their higher ups pretty often.
To clarify, I’m not a freelancer. I own my own company–but so do many other freelancers. The way that the Phoblographer works though is sort of like I am a freelancer with sub-contracts to other freelancers. It’s because I’m the sole partner.
So what can you get from the jist of this thread:
- It’s imperative to have a Roth 401K. That way, you can put away money that won’t be taxed otherwise. The way that US taxes work for freelancers (in layman’s terms) and small business owners that don’t have a corporation is that you can write off a ton of expenses. After those expenses are calculated, you get your profits. Then you incorporate state tax, city tax, federal tax, and self-employment tax. For those of us in NYC, it’s around 47% of our “profits.” But what that often ends up being is the money that we’re actually using to live. So if you only profited $30,000 or so you can expect to be forking over maybe $15,000 overall. In that case, it’s best to put yourself on a payment plan with the IRS.
- Healthcare insurance is expensive. I personally pay almost $700/month and don’t have a top of the line healthcare option.
- You need insurance for other things too, like your business or gear
- If you’re under 26, you can use your parent’s insurance
- Basically, don’t do anything stupid that is going to put you in the hospital with a ton of medical bills and that won’t allow you to not work.
- You pretty much should just marry someone with these benefits.
The thread has a number of other pretty awesome hacks; but do keep in mind that a lot of things are really difficult in the freelance life.