Today’s certainly been a day of contrasts. I’ve just finished publishing a review of a freelance platform that’s most suited to people with PhDs, and now I’m right at the other end of the scale ready to talk about cash flow issues and side gigs!
As I discussed over a year ago in an article that will help you work out if you’re suited to the home-working lifestyle, freelancing always comes with an element of “feast and famine.”
I’d love to say that after doing it for over a decade this stops being the case. However, it would be wrong to lie to you. In some ways, cash flow becomes more of a challenge when you’re earning more.
It does undoubtedly get easier. Once you have plenty of regular work, real “dry spells” are a pretty rare thing. However, all kinds of things can happen to make finances challenging and create a “perfect storm” of freelance cashflow anxiety.
I’m currently weathering one of those storms myself. My wife and I had a second child in December, and he’s only just starting part-time childcare. As such, we’re only just beginning to claw our way back to our previous joint income.
Meanwhile, here in the UK, it’s front-page news that HM Revenue and Customs (the equivalent to the American IRS), is “letting self-employed people down.” Millions of phone calls are going unanswered there, and unfortunately I’m awaiting a refund of several thousand Pounds that has, as yet, failed to materialise. Every time I need to chase it, I lose valuable time where I could be earning more money.
Then there’s the everyday challenge of cash flow that all freelancers have to get used to; At any one time, it’s quite normal to be owed a considerable sum while you’re waiting for invoices to be paid. On this particular occasion, I’ve also been doing some project work that’s caused me to incur some expenses “up front,” so that gets added to the long list of “money that’s mine that I’ve not got yet!”
Typically, this rare “perfect storm” has occurred exactly when we need to renew our car insurance and tax, have an annual service, and budget for childcare for our eldest over the summer holidays.
Finally, to top it all off, I have a couple of upcoming assignments that are taking a little while longer than I’d like to move off the starting blocks.
I know these projects will happen; They’ll happen all at once when I’ve already got a busy week planned! It’s always that way, simply because fate sometimes likes to have a bit of a laugh at freelancers’ expense!
I know this is all temporary. It’s scared me in the past, but it doesn’t so much anymore. One of my favourite anecdotes for aspiring freelancers is about the Christmas when I was owed over £15,000 for all of December and none of it appeared in my bank until Christmas Eve. That was one frantic day of shopping!
Anyway, the point of all this moaning is to raise how important and useful side gigs are to freelancers. As I just said, these bumps in the financial road don’t bother me so much now, because I’ve spent time building up a dependable portfolio of things I can turn to when I need smooth out periods of patchy cash flow.
Upping your “side gigs game”
The first thing my wife and I always do when we anticipate a “lean spell” is to have a bit of a clearout. When things get tight, listing a few things on eBay or Facebook marketplace both clears down the clutter of crap we’ve bought while we’ve been “flush,” and generates enough money to cover the weekly grocery shop or some treats for the children.
It’s also a good time to “cash out” money from other side gigs, if you’ve let cash build up during more buoyant times. For example, my wife uploads photos to Job Spotter while she’s out and about, and sells books on Amazon. We both let money build in TopCashBack all the time too.
Another thing I like to do, if time allows, is leave UserTesting open on my computer while I’m working, and do a few website usability tests when they pop up.
The key point is that all these side gigs add up. The more you get involved in, the more spare cash you find floating around when you reach a point you need it.
Another little trick that I absolutely love is using the Hotels.com reward scheme. You earn a free hotel room night for every ten booked. It soon builds up if you use it for business and pleasure, and I make sure I always save the nights for times when we wouldn’t otherwise be able to contemplate getting away.
This means that even during a lean time where cash flow looks scary, we could still rustle up a weekend away, with the accommodation paid for and spending money withdrawn from our various side gigs and cashback avenues. I can even cash some points earned doing surveys for some Amazon vouchers to buy treats to take with us. This all goes a LONG way towards keeping us sane!
It’s arguably harder for employees
The irony of all this is that working freelance is what truly gives you the freedom to set up plenty of side gigs and invest time in them. A traditional employer isn’t going to like it much if you break away from work to earn an extra ten bucks doing a website test, or go for a wander to earn a little on JobSpotter.
Well-prepared freelancers with plenty of side gigs up their sleeve are arguably in a stronger position to cope with an unexpected “rainy day” than someone who’s committed the entirety of their working week to commuting and working for an employer. Sure, they don’t have the stress of the peaks and troughs of freelance work, but nor do they have the ability to pivot into different things when the need arises.
A fixed income is in some ways enviable, but it’s fixed in both directions.
Weathering the storm
The thing about these freelance slumps is that they always come to an end if you keep soldiering on and working. I have no doubt that in the coming weeks all the clients I’m waiting on will have been in touch, I’ll have plenty of the money that I’m currently owed, and I’ll probably have some other new project underway that I don’t even know about yet. I might even have that refund from the tax people!
At that point, it would be easy to forget the user testing, the surveys, the eBay pile, and all the other things that keep little trickles of money coming in. However, while it’s great to enjoy a break from the penny-pinching for a while, it’s always good to keep those side gigs ticking over, even if not with quite the same determination.
The more side gigs you have, the more you smooth out those peaks and troughs, and the less you have to fear the quiet times. In fact, what this particular lean patch has encouraged me to do is investigate and review far more of these opportunities for the future – both for you and for me – so stay tuned!