The Transition from Student to Full Time Freelancer

Originally published
Note: This article was published while I was in my early 20s. I was much younger and dumber. Please don't hold it against me. One of the perils of having a 20+ year old website!

I started freelancing all the way back in 2002, when my church came to me looking for a website (which at the time I didn’t actually do- talk about divine intervention!). I was a junior in high school, I used Frontpage, and GMail had yet to grace me with it’s presence. I had always wanted to run a business and this seemed like a really good opportunity, so I went with it; I freelanced all through high school and college. It was at the end of my senior year in 2007 that I realized I wanted to keep doing it and went to grad school to learn more about my trade, and better prepare myself for freelancing in the real world. That however, turned out to be harder than I thought. I got my Masters Degree in May of 2009 and wasn’t quite prepared for the roll of full time freelancer. I stuck with it though, and am still freelancing full time. With college and high school graduation season coming to an end, I wanted to offer some advice for the student freelancers out there who want to take the post-grad full time plunge.

Be Financially Ready: First and foremost, you need to have money saved away. This is for the slow times, the extra bills you will likely incur (I’m looking at you, student loans), and tax time. I recommend starting as early in your freelance career as possible and putting between 40% and 50% of your income in an interest bearing account. I thought I was ready, but six months after I graduated student loans started to kick in, work slowed down, and I panicked. Luckily I got through it.

Get Rid of Any Other Debt Your Have: Quite frankly, student loans suck, especially if you go to an expensive school. You could be looking at $500/month in loans depending on how long your payback period is, how much your interest is, and how much your tuition is. Because of this, you need to eliminate any other unnecessary expenses you have.

Generate Other Streams of Income: This is really a general freelancer’s tip, but it’s important to start early. There will be slow times when new work isn’t coming in and having those other forms of income will help with that. It will also help you realize a higher income potential you wouldn’t be able to achieve strictly working on jobs. This doesn’t necessarily need to be a product or service you offer. I teach part time at my alma mater, which also gives me the opportunity to get out of the house (my office). Plus, I really do enjoy teaching! However, school does provide a unique opportunity to work on your possibly profitable projects for credit. Be sure to take advantage of that.

Decisions, Decisions: Once you graduate from college, you have a lot of decisions to make going into the “real world.” This is multiplied for freelancers, who also have to think about these things:

  • Since you can work from just about anywhere, you need to decide where you’re going to live. Do you want to move back home, stay in your college town, or move someplace else? I made the decision based on my connections, opportunities, and finances.
  • If you were a full time employee somewhere, you’d probably get among other benefits, health insurance. That is one pitfall of being a single full time freelancer. You need to decide how you want to go about it. In the USA, rumor has it that starting in September, you’ll be able to stay on your parents’ plan until you’re 26. However you’ll inevitably have to decide how you want to do it, whether it be COBRA, joining some freelancer’s group/union, or getting it yourself. Talk to an expert in your area.
  • Another thing  you’ll have to think about is retirement & savings. Full time employees can usually get a 401K from their employer. How do you want to plan for your retirement? You can get your own 401K, an IRA, a Roth IRA, or several other options. Again, talk to an expert; a lot of banks will also offer these.

Have an Exit Plan: Finally, you may realize that full time freelancing is not for you. You may get a great offer at a firm a year into their full time freelance gig. That’s ok- just be sure to have an exit plan if you decide to temporarily or permanently leave freelancing as a full time deal. Some questions to ask yourself:

  • Can you still freelance with the full time job you get? Some places will make you sign non-competes, baring you from doing work in a similar field. You may not have time anymore. How do you want to handle it?
  • What will you do with your current clients? How do you want to wrap up any current projects? How will you direct them in the future?
  • What about current services? I for one, offer hosting. In the event that I want to leave freelancing, I need to figure out what I want to do with the people I am hosting on my server. Do you offer support, hosting, or some other service? You’ll need to have a plan for that. 

I hope these tips are helpful. They are not meant to scare you if you are thinking about taking the plunge right out of school. In my opinion, it’s the perfect time to because you don’t have other things like a family, a house, etc. to worry about. But these are some real considerations you do need to take into account. Being prepared will make your first year that much easier. Good Luck!