3 Emerging Ways to Make Freelancing Less Risky - Make a Living Writing

3 Emerging Ways to Make Freelancing Less Risky

Carol Tice | 47 Comments

Make freelancing less risky with these tips.Are you scared to take the plunge into freelance writing, because it feels too risky?

After all, there’s no regular paycheck coming in. No paid sick time. And for those of us in the US and some other places, no healthcare unless we buy some on our own.

I meet a lot of would-be freelance writers who’re still slogging away at the day job they hate, mainly because they worry about whether they’ll be able to pay the bills as a freelancer.

As the world shifts increasingly over to a freelance/solopreneur economy — we’re expected to make up half the economy by 2020 — it would be nice if our governments did more to support independent contractors. But so far, not a lot progress on that front, as Elaine Pofeldt recently pointed out on Forbes.

Fortunately, there are a few emerging ideas that may help make freelancing less risky:


1. Income insurance

Financial services startup Even helps you figure out what your average monthly pay is. Then, it sets up an FDIC-insured savings account that socks away any extra money you earn in good months. When you have a down month, your emergency fund is there for you.

Don’t have any money in the savings account? Even gives you an interest- and fee-free advance against your next big earning month. The site charges $3 a month, they’re based in Oakland, Calif., and launched in January. I have to say, I’m intrigued!

Also, if you want, you’re free to withdraw the overage you’ve saved at any point. So if you’re not using it (hopefully income just keeps rising!) and it piles up, you can just cash it in if you like.

Drawbacks: Looks like you’d need to have been freelancing for a few months already, to be able to create an average and start using the program. But knowing you could create a steady monthly income and iron out the bumps-and-lumps has some serious appeal.

Also, Even co-founder Jon Schlossberg tells me they don’t yet support freelancers! For now, it’s for employed workers with irregular hours and paychecks. They’re hoping to roll it out to freelance workers next year…so stay tuned. It would be great to see other companies spring up to offer this sort of service to freelancers, too.

2. Get paid sick days

Getting sick can be a disaster for freelancers. Clients can get pissed off and drop you, and obviously there’s no pay for days you can’t work.

Or is there? The Guardian recently reported on sick-leave options that are emerging for freelancers, including Broodfonds in The Netherlands. There, workers pay into a sick-time pool and can draw out if they become ill.

In the UK, workers can join The Association of Indpendent Professionals and the Self Employed (IPSE), and receive a sick-time insurance policy as a member benefit. Self-employed UK workers can also purchase income protection insurance.

This area is of high interest to me personally, because I tried and failed twice to get a disability insurance policy here in the US — we need more options here!

3. Avoid getting stiffed

Too many freelance writers end up getting stiffed by clients, or waiting ages for payment. In the EU — you lucky ducks — a new law allows you to tack a €40 fee onto bills that are late 60 days or more.

Another option for compelling payment is mutual invoicing societies, such as SMart in Belgium. Now available in eight European countries (but not the UK) at the moment, SMart gives you a large group that can throw its weight behind you and apply pressure for collection of unpaid invoices. If it’s not successful in helping you collect, SMart’s mutual guarantee fund pays you out.

Got to say I *love* this idea — hope to see it come to the US!

Advocate for change

The European Freelancers Movement has formed to try to put the needs of freelance businesses on countries’ political agenda. If you live in this region, you can sign their manifesto, join, and get involved in advocacy. Of course, here in the U.S., there’s also The Freelancers Union.

If you’ve used any of these options, or try them out in future, I’d love to hear from you on Facebook! Let’s hope more ideas like these emerge in the coming months and years, to help people who want to freelance make the leap.

Freelance Business Bootcamp: How to Launch, Earn, and Grow into a Well-Paid Freelancer. By Carol Tice and Neil Tortorella

47 comments on “3 Emerging Ways to Make Freelancing Less Risky

  1. Krystal C. on

    Thanks, Carol. I was actually thinking incorporating first might make it easier to get insurance.

  2. Krystal C. on

    Carol, talking about insurance, I’m trying to get off the content mills and into private bidding, but I have to admit I’m getting pretty discouraged right about now.

    I’m a non-fiction freelance writer. My niche has been home and family, but I write about other topics, too. I began to realize that if I was going to bid for the really good jobs, I would need to get errors and omissions insurance against lawsuits. I have the confidence to know that I’m a good writer, but I’m not perfect. I know I could make mistakes. I want to get set up with E&O and liability BEFORE I begin private bidding.

    I don’t get it, Carol. I can only find a few companies that advertise that they insure writers. So far I have called 4 of them. 3 told me they don’t insure freelance writers and the 4th wanted to insure on an occurrence basis. Meaning I have to wait till someone accepts my bid and then ask if I can get insurance on that one client. I expect a lot of the jobs I get would be short-term assignments, though. I joined the Freelancers Union hoping I could get insurance there. Their insurance company said they don’t have the products for freelance writers.

    Don’t these people want our money? I am happy to pay for the insurance. Other professions can get it, so why not freelance writers?

    Right now I’m a sole prop, and I already know that I have to incorporate and that will give me some built-in protection, but from what I’ve been reading, there’s still a level of risk when you incorporate as a single owner of your business. I’m not willing to take that risk, because I have more than myself to consider.

    Am I missing something here? Is my only option to start my own blog? At least then I could get blogger’s insurance on my own website. But I really like the idea of bidding to private clients, because I like the variety offered there. Do you have any suggestions for getting over this obstacle? Thanks in advance for anything you can suggest.

    • Carol Tice on

      Try asking your home or car insurer — they should be able to refer you. I think mine is with The Hartford — but maybe being an LLC makes them more willing to insure, I’m not sure.

  3. cheryl on

    Hi, Carol. This is new for me, and I’m happy I found your site. I’m just beginning to get educated in this freelance idea and I’m really hoping to learn how and be able to make a living at it. I just want to comment after reading the blatantly RUDE comments on here about the healthcare issue and your sons unfortunate health conditions: I’m quite the republican myself (not all republicans are jerks!) and have a very healthy desire for less government. About as much as my desire to become a freelancer : ) I’m currently unemployed and while I’ve been job searching, I have to say I am absolutely DREADING having to go back to an office and a boss. Ugh. I so want out of that environment and work for myself! So…I agree heartily with your comment about freelancers not wanting a “job”. The health care issue is real and scary. BUT, in my opinion, the last thing we need is the “government” getting involved. I’m all for groups forming and pooling together and keeping the governments paws out as much as possible. I’m also considering moving to another country because of it. If you can freelance and make a good living, would you/have you considered that? I’m just thinking about how difficult it is in this country to achieve a high quality/lower stress life, it may be worth serious consideration. What are your thoughts on that and do you know anyone personally that has done this and are they happy? Thanks for any input you’re willing to share!

    • Carol Tice on

      Because of my younger kids’ special needs, travel has been difficult, much less relocating to another country! Some countries have public health, but higher tax rates.

      Certainly, I know many people who have moved to cheaper countries for this reason…but then it is more difficult to connect with a pool of local clients. For quite a while, I had 3 Fortune 500 companies who were all based in my own city as clients…so that option is closed to you. So you might earn less. I suspect that for many, it all comes out even in the end.

      But if you want to hobnob with expat writers, I have a ton of them in Freelance Writers Den…living in China, Belgium, you name it.

      • cheryl on

        Thank you so much for your comments, I truly appreciate them! I reviewed a bit of the Freelance Writers Den earlier this morning (I believe), which led me to your site here. There’s soooo much to read, I’m already losing track! All the links on sites get out of control : ) I currently have 7 tabs open, some still from early this morning! I’m taking a lot in.

        I haven’t read that much about you personally yet, and maybe you haven’t even posted it, but I was not aware that you have 3 kids with special needs, so I sincerely hope you didn’t think I was being insensitive to suggest you move to another country! I was just genuinely curious since the issue of health care was a topic.

        From what I’ve read today, you sound like a great lady with a fantastic, upbeat personality and plan to read much more of your insights into this foreign field I’m interested in : )

  4. Susan B. Bentley on

    Thanks so much for this Carol as today I learnt something new! I had no idea there was an EU law around an extra charge for late payments beyond interest. Another carrot to add to my ts&cs!

  5. Kaitlin Morrison on

    Yikes. I think some of the commenters here may not fully understand insurance. When I pay for health insurance, I’m taking my own money and paying for someone else’s care, so that when I’m sick, I’ll be covered also.

    And, I’ll gladly pay for someone else’s care now, just in case. Because I’d rather not go bankrupt if I ever had it happen to me. I’m ok with my tax money doing the same. It’s how insurance works, pure and simple.

  6. Cat Johnson on

    Thanks for the post, Carol

    There’s an interesting article on Fast Company today, written by Sara Horowitz of Freelancers Union, about the need for government to catch up with the rapidly-growing freelance movement.

    In it, she argues that “a lot of the problems that affect independent workers are issues that can only truly be solved by changes in policy.”

    Here’s the link: http://www.fastcompany.com/3047238/why-policy-makers-need-to-pay-attention-to-the-freelance-movement?utm_source

    • Carol Tice on

      Thanks for sharing this resource, Cat! And I agree with that — we need to advocate and raise consciousness in government about how business WORKS now, and that freelancers need access to the same benefits workers enjoy — disability and sick pay. We need more programs that will insure us.

  7. William Mortensen Vaughan on

    I want a job; that’s why I’m here, and joined your Den. Some governors, such as Reagan (may he R.I.P.) understood/understand freelancing. What other governors don’t understand is that, as Margaret Thatcher (may she also R.I.P.) said, “The problem with socialism is that, sooner or later, you run out of other people’s money.”

    P.S.: I’m glad the government used the hundred dollars they took out of my tax return for a worthy cause, but please tell your son he’s not welcome. I’d rather he and others got jobs and gave me back my hundred dollars.

    Is he not doing as well as you are with the whole making a living writing thing?

    • Carol Tice on

      Perhaps you’ve never self-insured and had someone in your family have a major illness, William. There are high deductibles and it’s pretty burdensome.

      If you want a J O B, my blog and Den may not be the best resource for you, as our emphasis is on freelancing.

      And it’s not my son’s fault that most jobs no longer come with healthcare. That would be a move Republicans encouraged and enabled, with their support of big business doing as it pleases, and not feeling any sense of responsibility towards its employees.

      • William Mortensen Vaughan on

        So you make six figures while I make less than $25,000 a year, and I’m supposed to be happy about subsidizing your son’s health care?

        Yes, I’ve self-insured. Yes, I watched my father die of a cerebral hemorrhage, bleeding from his eyes, ears, and mouth like a poisoned dog. But we pulled our own weight. We didn’t go around with our hands out like the world owed us something.

        Who voted for Obama, mama? Who voted for Obama, mama?


  8. William Mortensen Vaughan on

    “[T]he best social program is a job.”
    –Ronald Reagan

    Taxes and regulations, of which Democrats tend to be more fond than Republicans, are what kill jobs.

    Whether they realize it or not, everyone is a T.E.A. Party-er at heart. Unless you send the I.R.S. and/or your tax collectors more money than you owe, or ask for a smaller refund, and unless you just want to pay more fees, fill out more forms, and jump through more hoops, you’re a T.E.A. Party-er at heart – TAXED ENOUGH ALREADY!

    As for ObamaCare, it was passed more than five years and two months ago, and all it has done for me is take about a hundred dollars out of my tax return.

    • Carol Tice on

      But we don’t *want* jobs, William. You completely prove my point — the government doesn’t understand freelancing. Government understands “you should get a job.” It doesn’t yet understand that that era is over, and a thriving economy will need to be geared to help freelancers flourish.

      P.S. My starving student son uses Obamacare, and as he has ulcerative colitis, at this point we might be bankrupt and he might be dead, if he hadn’t been able to be on this healthcare program.

  9. Laurie Stone on

    Its too bad insurance stands in the way of so many talented writers becoming freelancers. Maybe things will improve in the future, especially if our economy is heading that way. Food for thought.

    • William Mortensen Vaughan on

      The Republicans have re-taken the House of Representatives and the Senate. If they can hold both of those Chambers and take the White House in ’17, the Free World’s economy should get an enormous boost.

      • Carol Tice on

        Perhaps…but Republicans are notoriously uninterested in providing aid programs — they’re out to kill Obamacare, for instance — so it might not be a great development for freelancers.

  10. William Mortensen Vaughan on

    Luckily, I don’t have the steady income/medical insurance problem, since I’m a military retiree.

    BTW, ObamaCare fixed everyone’s medical insurance problems in the U.S.A., didn’t it? [tongue in cheek]

  11. Casey on

    Carol, I had to search high and low for disability insurance, because most companies, as you said, won’t cover freelancers. The Freelancers Union (based in NYC) contracts with an insurer with policies that cover freelance writers. I think I pay $10/month for mine. That’s also where I found my professional liability insurance.

    I love the idea of a sick-leave pool and hope it will come to the US.

  12. Cynthia on

    I live half-time in the US and half-time in France (married to a French citizen). There are pros and cons to both systems – setting up a business in France, even as a freelancer, is difficult. You can’t just set up shop. You have to choose a business status and taxes are high. I’m an Auto-Entrepreneur which means I can’t take tax deductions or make more than around $40K/yr. My tax rate is 25% plus business tax and insurance ($200/yr). In Florida I had to get a business license ($400/yr) plus be bonded ($1,000/yr) to do fundraising.
    The pros in France however is that if I pay taxes then I automatically participate in the medical system which is FANTASTIC! It’s free and pays 80% of everything including drugs, and 100% if I enter a hospital. I get better care here than in the US so the 25% income tax is worth it to me. Europe is so far ahead of us with getting their rights represented extremely well and with the benefits they have available to them, including freelancers.

    • Carol Tice on

      Thanks for this interesting compare/contrast on US vs France, Cynthia! I wonder what happens if you earn more than $40K in the French system…

      • Cynthia on

        Carol, you have to change business status to SARL, Microenterprise, etc. The taxes then go up to about 33% but you can have business deductions to bring them down. But the accounting part is so complex that you have to hire a professional around 1500 Euros a year. It’s all doable since there are plenty of businesses here but the bureaucracy in France is infamous, as is the paperwork. It is getting better though, and in my experience, the US is getting worse in regards to bureaucracy.

        • Carol Tice on

          Well, I’d say most successful US freelancers *do* hire a tax professional, though not sure mine costs quite that much. I’d say red tape here in the US is holding steady…I haven’t felt it’s getting worse in the past decade that I’ve been freelancing.

      • Cynthia on

        Carol, just to plant a few ideas in your creative mind – France has a “skills and talents” self-employed resident status. If you can get through the hoops you could move to France based on your self employment status. Ireland has a creative person residency opportunity – if you’re a creative writer, painter, sculptor, etc you can move to Ireland on this special residency permit. I’m sure there are other countries too. Just something to consider when your kids are grown? By the end of next year I hope to be living half time in Ireland and half time in France. It would be great to have some creative company. 🙂

        • Carol Tice on

          Our kids are special needs and it’s not clear if or ever they’ll be living independently…but I continue to hope that I will get to do some travel somewhere in here! I’d really like to go live in Israel for a time, for instance.

  13. Peterson Teixeira on

    I am from Brazil and the getting sick part is a problem EVEN if you HAVE A JOB. Since you provided that info about around 2020, freelancers will be half the economy, I believe that a lot of companies will provide more benefits for solopreneurs.

    Always great to check your posts Carol

    • Carol Tice on

      Well, that’s the thing, Peterson — companies will NOT provide benefits to freelancers. Because we’re not their employees! Governments, or alliances we organize, will have to push for it.

      • Peterson Teixeira on

        Yes, I know. But this “Freelancer Era” will set new standards, it will make freelancers see their work as a business (not a lot of freelancers do that nowadays) and therefore, will open their eyes to demand more from the market.

        But this is just a lucky guess….but I hope that this turns into a prophecy haha


        • Carol Tice on

          If I knew the magic that would make freelancers take their businesses seriously, Peterson, I’d have already waved that wand…and support is just not going to come from clients. The whole reason they hire us vs employees is to not have to deal with fringe benefits!

          But we can organize, and advocate, and band together in organizations that may give us competitive advantages. I love the ideas presented here, and hope we see more of them.

    • Rob S on

      A big reason why companies are hiring freelancers is because they don’t have to pay us benefits. I don’t think that’s going to change any time soon. I have managed to get promises of two months notice from a couple of my long-term clients, but that’s the best I’ve been able to do.

  14. Rebecca L. Baisch on

    I thoroughly agree with your stand from a philosophical viewpoint.
    However, I was replying to the post in the context of how to make freelancing less risky.

    From a U.S. or a global standpoint these sorts of platforms are where most “freelancers” start and indeed, from what I’ve been able to glean, many of them are quite comfortable with this quasi-independent work model, even as they may decry the exploitive nature of the environment.

    Bear in mind that the term freelancer encompasses just about every saleable skill there is. I have a good friend who is a three-language translator, and she makes a pretty solid (very high 5 figures) living off of these sites.

    My point wasn’t whether anyone should use these sites. It was that they are not regulated in a way that reflects what they do. Call them recruiters, temporary employment agencies or worse, they are not going away because you or I don’t think people should patronize them.

    As far as fees go…what do writers pay publishing agents? There are costs attached to everything. I’d love not to have to carry liability insurance, but it’s a CODB.

    To me the real cost of these sites is that they exploit people, and they can do that because they exist in a sort of fringe or undefined business identity environment.

  15. Rebecca L. Baisch on

    All of the solutions mentioned in this article and post rely on some form of quasi-union/government structure.

    Before we need any of these fixes, we need a better definition of a freelancer. In many cases they are not functioning as independent business owners. They are functioning as temporary employees but without the protections afforded to temps at best, and migrant workers or day laborers at worst.

    Digital platforms such as ELance, Upwork (formerly Odesk) etc essentially function like B&M temporary help agencies. They define how you can bid, to whom you can bid, how much you can bid and even whether you can bid in some cases, and handle any disputes through controlled mediation firms. Often you can’t even vet a client before bidding.

    That not the model of independent business owners. Before we start looking for some sort of corporate or government income protection, maybe we could work on the issue of defining how much control the middle men should have before the freelancer is considered an employee.

    • Carol Tice on

      Rebecca, as you probably know, my philosophy is to avoid working with these sorts of platforms.
      Government’s not going to do anything about Elance, because it’s an independent business and you’re free to join and use their model or not.

      You raise an interesting issue, but I’m very familiar with the classifications for employee vs contractor, and you’re never going to get Elance classified as your employer. The solution is to move away from these sorts of platforms and stop giving them a cut of your money.

  16. Patricia on

    I love what IPSE & SMart are doing!! <3

    Here in our country, there's this freelancer site (Raket.ph) that's working to offer their members healthcare coverage via the HMO company Maxicare. Hope it comes into fruition.

    • Carol Tice on

      Yeah…the problem is we don’t have the lobbying money of big biz. But I love these ideas of banding together for advocacy. That’s what’s needed to get people out of their denial about how important the freelance economy is to the health of the nation, and they need policies that support it. Obamacare was one step, unhooking healthcare from employment…but we need lots more.

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