When I was a child, dreaming about being a veterinarian, I believed that my career would be determined by my passions. I thought that whatever made me the happiest would be the way I spent my days.
By the time I got to high school, I was considering business management or marketing—I thought that a substantial paycheck would be the most influential factor in my occupational pursuits.
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I had no idea that my career path would ultimately come down to concerns over health benefits and matching 401(k)s, work-life balance and job security. Little did I know that choosing an occupation involved so much more than just passion and paychecks.
The Accidental Freelancer
After college I found my way into data analysis with a midsize alcohol distribution company. The job came with paid vacation time, health care benefits and a generous retirement package. It was a very adult job, with stable hours and a company Christmas party every year. In fact, this grown-up job is where I met my husband. I did my job well and got promoted quickly, taking on added responsibility while still managing to get home every night in time to cook dinner for my family.
Then, during one of my more dull moments at work, I wrote an email to an editor at a fashion website that I read religiously—and I was invited to contribute my first piece about stylish motherhood. In the beginning it was a hobby, writing one piece a week in the evenings after my daughter had gone to bed.
Within a year of that first post, I was writing every day. When the company launched a parenting website, my editor recommended me for a contract contributor position. I spent my lunch hours dashing out stories before returning to my day job spreadsheets. At home, the minute that dinner was done, my husband took over with our daughter, and I sat down to type.
It was a difficult time because I love writing and being part of an internet community, but I felt guilty being so focused on my day job. Writing was a passion that I had never considered turning into a profession—it’s one of those unreliable, creative-type jobs that parents try to lead you away from when you're a teenager. At the same time, I was beginning to make a name for myself in this highly competitive but rewarding industry.
In 2011, after four months of trying to juggle what had become two full-time jobs, I decided that I had to make a choice. Life couldn't go on like this.
Work-Life Balance vs. Financial Security
Writing or data analysis? The decision should have been based on which activity I enjoyed the most—the one that gave me the satisfaction that’s necessary in every successful career. But enjoyment wasn’t on my mind. Instead, I was considering the pros and cons of steady employment over life as a freelancer—and which profession might be more economically viable decades from now.
Thankfully, my amazing employers provided financial consulting for all employees, so I took advantage of this perk. The first order of business was to discuss taxes and all the ways in which an independent contractor must be responsible for their own government payments. From paying twice the FICA taxes to making quarterly estimates, there were plenty of tax considerations. In fact, my financial planner warned that I probably owed at least $2,000 to the IRS already for my additional untaxed income that year.
Retirement and benefits required an entire second meeting. When comparing salaries between my increasingly cushy analysis job and my expected freelancing income, the raw numbers didn’t even begin to tell the whole story. My analysis salary was at least 5% higher than the number on the checks, thanks to matched contributions into my 401(k). Then there was the year-end profit sharing.
Although my daughter and I would be eligible for health care coverage under my husband's plan, his insurance would go up, equaling a couple hundred dollars a month. For workers who can’t depend on a partner's employer, the cost of covering your own health insurance can be a huge barrier to freelance work. As Olga Khazan at Forbes warns, “Health insurance premiums are rising, making the high-risk life of an independent worker even more unpredictable.”
Armed with information, my husband and I sat down to discuss the less-quantifiable aspects of my potential employment. His main concern was my personal happiness, so he always brought the conversation back to which position would give me the most job satisfaction. Given that he had a steady full-time job in transportation, and we had a financial cushion that would allow me to take a cut in pay, he was supportive of whatever decision I made. That said, freelancing provided the type of flexibility that many working parents dream of—I would be able to volunteer in my daughter’s classroom, and still work when she was home sick. But my data analysis job gave us a dependable income that rarely varied, which is a necessity when you’re trying to save for college.
Decision Time ...
In the end, I chose to accept the inherent risk of freelancing. I worked part-time at my data job for six months, and retained the services of a financial consultant to help with the transition. At the suggestion of my first editor, who'd turned into my mentor and close friend, I began to look at my work as a personal business. I set up invoices, tracked billable hours and saved the receipts from interviews done during my lunch hour.
By concentrating full time on a job I truly enjoy, my overall salary has increased 10%.
In the beginning, it was a little terrifying. During my first month as a full-time freelancer, my most consistent writing gig cut back on my daily post count. That month, I made about half of my normal salary. But the situation got easier—my portfolio diversified, and my employment became more steady. My husband and I got used to paying into our IRA and HSA at the beginning of the month, setting aside a tax estimate with each check. And I learned to manage my own time, as well as be in more direct control of my finances.
By concentrating full time on a job I truly enjoy, my overall salary has increased roughly 10%, and I’ve since branched out by writing for other sites and even appeared on "Good Morning America." Despite these high points, I do miss certain aspects of my old job, like my coworkers and the joint sense of purpose that traditional employment can bring.
A recent episode of MSNBC's "Up with Chris Hayes" focused on the changing face of America’s workers. They stated that a third of the country is considered “contingent workers,” meaning temp, part-time or contract employees. These workers, they argued, don’t receive the same commitment or support from their companies. One guest even called this growing trend “an inconvenient truth.” They looked at contract work like a problem that needed to be addressed.
In many ways, they had great points. My employers don’t owe me more than a month’s notice before terminating my contract. They don’t pay into my retirement or invest into my training. I'm not a part of their company. But none of that takes away from the work that I do.
As a contract worker, I know that I can demand a higher cost than I would as a salaried employee because I’m still cheaper than someone who needs office space and health care. I know that I can juggle multiple employers at once, and that I can manage my time for them in whatever way fits my life best. Once I figured out how to plan my own tax payments and retirement savings, it was just a matter of having the fiscal control to follow through.
It’s not always simple, but the payoff is a job that I love and work-life balance that would never be possible in a traditional work arrangement. In the end, it wasn’t all about passion and paychecks. However, I realized that if you have the two, it only takes a little more effort to figure out everything else.
Love reading other people’s financial tales? Check out more great LearnVest-exclusive personal stories.
Lindsay Cross is a former data-analyst-turned-writer who is now an associate editor at Mommyish.