As a self employed professional writer, you may find yourself wondering about the link between freelancers and the recession. While the current economic difficulties the United States is experiencing are weighing heavily on everyone's mind, there are both positive and negative aspects for freelancers to consider in regards to the recession.
If you're trying to look on the bright side, here are some benefits to the current economic recession:
- While companies often lay off employees during an economic recession, there is usually still plenty of work that needs to be done. In many cases, the projects that employees would normally be doing are picked up by freelancers. This provides a good opportunity for freelance writers to make contacts in new industries.
- Since freelance writers have a low overhead associated with their business, they don't need a lot of cash to meet their monthly expenses. A computer and Internet access are the only true necessities. This puts freelance writers in a much better position to deal with economic turmoil.
- If you specialize in writing about the economy, frugal living tips, or job hunting advice, you'll have more opportunities for assignments than ever before. Even publications that normally don't address these topics have started covering these issues in response to reader demand.
Although the recession does present some new opportunities for freelancers, it's important not to overlook the challenges it creates as well. For example:
- For tax purposes, freelance writers are usually considered independent contractors and not employees. This means they are not eligible for unemployment compensation if they are unable to find assignments for a time.
- During an economic recession, a lot of laid off workers decide to open their own businesses. This means you may find yourself competing with a large number of new freelance writers.
- If a lot of your clients are in industries that are struggling to stay afloat, you may find yourself having more discussions about whether or not your rates are too high. While setting freelance writing fees depends on a number of factors, sometimes you may be forced to lower your rates in order to have enough work to keep yourself busy.
Freelancers and the Recession: Keeping Your Cool
If you're a freelance writer worried about the link between freelancers and the recession, here are some tips to help calm your frazzled nerves:
- Don't use credit cards more than you absolutely have to. As a freelancer, your income is probably quite variable from month to month. You don't want to have a huge balance that you are unable to pay off if you lose a major client.
- Beef up your emergency savings. Having an adequate emergency fund is important for anyone who is worried about an economic recession, but it's especially crucial for freelance writers. If your emergency fund isn't quite where it should be, visit LoveToKnow Save for tips on clipping coupons, cutting expenses, and getting back on track with your savings.
- Touch base with your accountant. Every working freelance writer needs to enlist the services of a qualified accountant. The laws regarding self employment taxes are rather complex and you want to make sure you're doing everything possible to minimize your tax liability. Also, if your income has decreased due to the economic recession, you may need to have your estimated tax payments adjusted to reflect this change.
- Make marketing a priority. When things are going good, many writers have a tendency to put off marketing efforts. However, it's important to keep aware of what opportunities are available. If a major client is suddenly unable to pay his bills, you need to have a clear plan for how you'll replace that income.
- Keep in touch with your colleagues. Since they usually work from a home office, freelancers tend to be rather isolated. This can be a benefit if you're naturally an introverted person, but tough times call for a strong support system. Make an effort to reach out to other writers in your area for general camaraderie, job tips, assistance with outsourcing projects, and discussions about freelancers and the recession.