Millions of people work as freelancers or independent contractors, and many more would like to take the plunge. The attraction is evident: as an independent contractor, you are your own boss, and you make your own rules. Both your finances and your lifestyle can benefit.
More Flexible Hours
As an independent contractor, you don’t have to work 9 to 5 unless you want to. You can set your own schedule, sleep late, work into the night, take a day off in the middle of the week—it’s up to you. That doesn’t necessarily mean less work; it just means you can choose your own hours.
Depending on what you do, you may have to be available at the times your clients need you. That can sometimes mean working late hours or weekends. But, when the project is finished, you can take comp time without asking anyone’s permission.
Create Your Own Retirement Plan
As a contractor, providing your own benefits package takes a little investigation, but it’s not only possible, it can work to your advantage. Often, employers will give you choices of benefits, but their “menu” is still rather limited. You’ll have a wider array of options available to you.
Creating your own retirement plan is a good example. Since you run your own business, you have the opportunity to save more tax-deferred money towards retirement. A SEP-IRA is simple to set up and run and lets you deduct up to 25% of your wages.
Work Where You Want
Most independent contractors run their businesses out of their homes, which means they don’t have to worry about commuting time. Many who work remotely with computer-based work, such as bookkeeping, tax preparation, or information technology, can live wherever they want.
If working at home is a distraction, you can always take a break and work at a library or coffee shop. Renting a shared office space may also be an option. Some coworking arrangements allow space for meeting with clients. The costs can be low and may be tax deductible as a business expense.
The thought of leaving your traditional job to become a contractor or freelancer may be appealing but also a bit intimidating. There are many advantages, however, that can make it worth it. You may be able to improve your financial situation and your work-life balance by transitioning to contract work.
Check out this article to learn more about the benefits of working for yourself instead of an employer!