I like to describe being freelance as being professionally unemployed. You have no idea when the next job is coming and you need to financially set yourself up as if the job you’re currently on could be the last. It’s an absolute must that you keep your overhead as low as you possibly can in the beginning. You can do this by living in the cheapest place you can while still being safe, not having car payments, and going out to eat as little as possible. You need your money to last because it might take you longer than expected to start having regular jobs.
What you can’t do is get a side job to cover you (at least in the photo/commercial industry). This is the kiss of death. You can’t turn down last minute opportunities to freelance because you have to bartend that night. This especially goes when you’re first starting out. People are only going to reach out to you once or twice before they give up on you if you’re unavailable. You need to ALWAYS BE AVAILABLE. This means that you’ll be living on a set sum in your bank account for a while because don’t forget, you’re now professionally unemployed. I can’t stress this enough, you have to be ultra thrifty in the beginning.
If you want to be a stylist you need to start working on your credit. Open a card and start charging everything but only if you can fully pay it off at the end of every month. This is CRUCIAL. Start building that credit score so you can start working on raising your credit card limit.
You should have one card for personal expenses and one card for business expenses. Don’t cross your purchases on your cards because you want to keep the two separate for tax reasons. You can charge all of your write offs to your business credit card. A stylist can write off things like purchases for their kit, ink for their printer, sneakers for when they work, gas for their car, etc. It’s easier if you practice keeping your business expenses from your personal expenses from the get go. You’ll be happier when you need to organize for your taxes.
Start using an accounting/invoicing site like Quickbooks or Freshbooks. Again, your life will be easier down the road if you do this as early as you can. You want to be super organized with your finances and keep track of your invoices. You’re going to be scraping at every penny in the beginning and you don’t want to lose any of that hard earned cash by being sloppy.
Put aside a third of your check for taxes. The best way to do this is to set up an account with your bank that automatically withdraws every month to a savings account dedicated to your taxes. You don’t want to have to scramble at the end of the year.
Find a good accountant. Ask your fellow freelance friends. People are always excited to share who they are using. Make sure you find an accountant that deals with other freelancers in your industry. If you don’t, your accountant isn’t going to be aware of all of the write-offs and they’re going to charge you more to file your taxes.
Health insurance is a must. Being on set can sometimes be dangerous. If you hurt yourself and end up in the hospital, you may need to get a full time job and have to say goodbye to your freelancing life to pay the bills. This is a necessary bill to pay every month.
It’s a good idea to have a car. You don’t want to turn down a job because it’s out in the suburbs and you have no way to get there. It’s also a must to have a car if you’re a stylist assistant. The cheaper the car, the better. You don’t want to have to make car payments. You just need to get from point A to point B.
Lastly, maybe not in the first year, but eventually you will want to contribute to an IRA. This is how you will be able to retire. The sooner you do it only increases the chances you won’t have to work until you’re 90.
All of these suggestions don’t need to be in place before you take your first freelancing gig, but they are all things that you should be actively working towards in your first year if you hope to continue freelancing. The sooner you get your ducks in the row, the greater your chances you’ll have at having a fruitful freelancing career.