Securing Your Safety Nets as a Freelancer


With the COVID-19 pandemic forcing many companies to furlough many of their employees, the newly unemployed must turn to other means of receiving income. The most popular one has been freelance or contract work, and the trend might stick around for a while. Freelancing comes with appealing benefits, such as the ability to work on your own time and your own terms.

But one of its biggest drawbacks is that it doesn’t have traditional benefits. Of course, we’re referring to the government-mandated ones such as unemployment compensation, paid leave, and so on. There’s also the fact that work and income are irregular. If you’ve been considering becoming a freelancer yourself or if you’ve just started, here’s a list of things you need to have in order.


Because freelancing is a solo venture, you’ll need to plan for your own contingencies. If you’re starting a small business, you’ll have to address the topic of owner dependency sooner or later. This refers to a company’s ability (or inability) to survive should something happen to its owner.

That said, you’ll also want to look into applying for life insurance. This is important if you have dependents who won’t have enough money to care for themselves if something happens to you. You’ll also want your relatives to have access to a life insurance lawyer if they need to make a claim. This is so that they won’t be contested or denied.

Related: Life Insurance: What to Consider As a Business Owner

Allocation of capital or savings

Freelancing is a feast or famine occupation, so you’ll need to prepare yourself for the dry spells that will come your way. You can do this by planning the allocation of your savings – or capital if you’re starting a small business.

Unless you’re a CPA yourself, you should consult with an accountant regarding your finances. A common reason for the failure of startups is the lack of funding. An accountant can be of great help to you even in the planning stages of your small business. They can advise you on your business model and help you plan for cash flow emergencies and long-term growth. Even if you’re not starting a small business, it’s important to track your finances. It’s perhaps even more important now that you don’t have a stable income.

Another drawback to freelancing is that you’re left to take care of many things by yourself. When you have an employer, for example, your taxes are automatically deducted from your paycheck. But when you’re self-employed, you’ll have to remind yourself to pay them. You might also need to consult a tax attorney if you ever run into issues with your taxes. It’s okay to be a novice, but know when to ask for help. Make sure to set aside funds for seeking professional advice.

Create your own benefits

One of the perks of working full time is getting government-mandated benefits such as health, dental, vision, disability, and liability. Unfortunately, freelancers don’t have that by default. Luckily, some organizations were specifically built to help freelancers with these issues. Trupo and Freelancers Union offer plans for freelancers and contract workers. They cover necessities such as health, dental, vision, term life, disability, and liability insurance.

man working on his laptop

Because everyone needs time off once in a while, don’t forget to make a plan for your vacation and sick days. You’ll need to average the amount you earn in a day and multiply it by the number of sick days or vacation days you need. This, of course, should come from a good calculation of your rate, which is another thing that’s crucial for you to know as a freelancer.

Related: How to Take Maternity Leave When You’re a Freelancer

Another task that you’ll have to D.I.Y. is building your retirement plan. This is another thing that an accountant or financial advisor will be able to help you with.

Being a freelancer will require you to stay afloat without the help you would have if you were an employee. If you’re planning on working freelance, make sure you plan for it well. Don’t be afraid to consult the right professionals regarding finances, legal matters, benefits, and more when you need to. Have a plan for every worst-case scenario you can think of. Set aside more funding than you think you need for emergencies. See that you have the resources to secure your safety nets before you venture into the unpredictable life of freelancing.


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