Should You Ditch Your Salaried Job and Go Freelance in 2024?

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Is a freelance setup right for you in the new year? Here’s how to know. 

The start of a new year tends to inspire people to make different financial decisions. And one decision you may be toying with is whether to continue working as a salaried employee or venture out on your own into the world of freelance work.

Being self-employed has many benefits, but there are also some drawbacks to consider. If you’re serious about potentially going freelance in 2024, ask yourself these questions to see if it’s a good idea.

1. Do I have plenty of savings?

When you go freelance, you give up a steady paycheck. In exchange, you sign up for a variable income, which could also mean some months of no income. If you’re contemplating a move to freelance work, check your savings account.

Generally speaking, it’s a good idea to have enough money in the bank to cover three to six months of essential expenses. That’s your basic emergency fund. But if you’re looking to go freelance, it could pay to save well beyond that point in case it takes you a while to find work, or in case you start off strong but then suffer through a dry spell.

2. Can I afford to pay for health insurance?

When you work as a salaried employee, you often get the benefit of subsidized health insurance. One of the biggest costs you might face by going freelance is having to pay for coverage on your own.

Now, your costs there will depend on factors like your age and location, and the type of health plan you opt for. But to give you an idea of what you might end up spending, Forbes reports that the average monthly premium for a bronze marketplace plan (the lowest tier you can buy) is $420 for someone aged 40.

That cost then increases to $549 a month on average for a silver plan, and $713 for a gold plan. These numbers, however, don’t account for subsidies you may be eligible for that could offset your costs.

Of course, if you’re married, you may have a spouse whose health plan you can sign up for, thereby making insurance less expensive. But if not, make sure you can swing the cost of buying health insurance on your own.

3. Will I struggle without paid time off?

Another nice thing about working for an employer is that you’ll usually be entitled to paid time off. So when there’s a national holiday, for example, you’re not expected to work.

When you’re a freelancer, there’s no such thing as paid time off. Rather, you need to build that time off into your schedule. But that’s not always easy to do. Also, consider that if you have children, you may run into issues if their school is closed for vacation periods but you’re not eligible for paid time off and therefore have to work.

4. Will my quality of life really improve?

Many people convince themselves that going freelance is apt to lend to a better quality of life. After all, you can set your own hours and make your own schedule. That could mean being there to meet your kids at the bus stop rather than having to hire a babysitter, and being home to walk your dog at lunchtime instead of paying for a dog-walker.

But while freelancing might enhance your life in some ways, it might make your life worse in others. If you’re constantly worried about money due to your inconsistent pay, that’s not a great way to live. And if you’re never able to take time off because you feel pressured to accept every project you’re offered, well, that’s not good either.

You may be thinking seriously about going freelance once 2024 arrives. But think about whether the freelance lifestyle is really for you and your finances. Better yet, talk to people who already live it and get their take. That might give you the insight you need to arrive at the right choice.

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