Monthly Archives: July 2012

Freelancing: A 6-Month Retrospective

At the end of 2011 I quit my full-time job to pursue part-time freelancing in order to have more time and flexibility. It has now been 6 full months, so I’m writing this retrospective post in order to evaluate my progress and make improvements. Hopefully it will be useful or interesting to others!


In short, I felt that given a finite lifespan, there were more fulfilling and enjoyable ways to spend some of my healthiest years than 40+ hour weeks in an office.

More specifically, there were a few activities I wanted to spend more time doing: cooking, climbing, yoga, and Zen practice.

In review, here are the numbers between then and now:

  • hours worked/week: 40-50 => 16-20
  • estimated vacation per year: 4 weeks => 12 weeks
  • meals cooked/day: ~0.7 => 2+
  • daily Zen practice (zazen): 15 minutes => 70 minutes, plus ~1 day a week at the Fire Lotus Temple
  • weekly climbing / yoga: 0 => 2
  • monthly income: unchanged!

Overall I’m quite happy with the time I’ve been able to set aside for my interests, and feel healthier in body and mind!


The first step was quitting my job, of course. Luckily in my case, issues with my job, combined with having a responsible savings and leads on freelance work made this decision pretty easy. Curiously enough, I’m pretty sure reading Fahrenheit 451 put the final nail in the coffin.

Once I was freelancing part-time, the two main challenges I faced were money and time: that is, budgeting for inconsistent and unpredictable income, and not squandering your free time or becoming bored and falling into unnecessary work. There was also the issue of finding freelancing jobs and maintaining a pipeline, but since that’s more specific to whatever your skill is, I won’t touch on that here.

I’ll tackle the money and time issues separately.


My favorite freelance budgeting technique has been to treat my freelancing as a business. Here’s how.

Deposit your checks into a separate account, set aside taxes, and then pay yourself a fixed amount monthly from this account. This way, if you don’t work for a period of time or want to take vacation, it is very clear how much money is remaining in your freelancing account. For example, if you have $9,000 in your freelance account, and are paying yourself $3,000/month (taxes are already taken out), you can go 3 months without another job if necessary or desired.

The first part of this is easy. Open a separate checking or savings account (this took about 30 seconds as an ING customer), deposit your freelance checks into this account, then transfer out your estimated tax withholding. For example, if you receive a check for $5,000 and you pay a 30% tax rate, deposit the check in your freelance account and transfer out $1,500 elsewhere for later tax payment, or alternately deposit the whole check wherever is easiest and transfer $3,500 to your freelance account.

Next, figure out your monthly budget. I’ll leave this to you, but mine included rent, utilities, health insurance, Roth IRA contributions, transportation, groceries, eating out, subscription services, and memberships. You’ll likely want to multiply this number by ~1.3 to get a padding for savings and unexpected costs.

Once you’ve done this for a few months and have a padding in your freelance account, you can even set up a recurring transfer for this amount on the first of each month from your freelance account to your personal checking.


Being busy is a form of laziness—lazy thinking and indiscriminate action.

– Timothy Ferriss

Because our culture so heavily emphasizes work and particularly having a full-time job for most of your life, unless you consciously and constantly evaluate how you want to spend your time, you’ll likely find yourself working more hours, regardless of necessity. Ferriss calls this “work for work’s sake,” and I wanted to avoid falling into this trap, instead finding fulfilling activities done for their own sake.

First, I set a limit of 20 hours of work per week. I provided this as my maximum availability to any particular client. Recognizing the need for flexibility (clients might overlap, or I might just enjoy working on a particular project for longer hours), I felt it was important to count any extra hours towards the future, and limit how many hours I could accumulate.

The balance of my freelance account allowed me to clearly see if I actually needed to be working. I decided that 3 months of padding is sufficient security, and I promised myself that once I complete any job that lands me at a balance over that amount, I’ll take off until I hit that threshold again. If I didn’t have an external savings account with plenty to live on for a bit, or was finding it hard to find new work, I might feel safer with a 6-12 month padding. However, either way, I can still schedule work in advance to start after my vacation, so that I can take off without much risk or worry.

Next, I had to use my free time wisely. And just as importantly, realize how not to use it. A couple years ago I started a permanent information diet; quitting Google Reader alone I gained hours every week, plus a noticeable ability to concentrate again. At first going to Reader/Twitter/Facebook/Tumblr were such mindless distractions for me that I had to block my access to them or I’d end up on them without realizing it, but after a few months those habits faded. I also found the same thing with TV shows, and made sure to be conscious of when a show felt like a chore to catch up on and stop watching it. Similarly with video games, when a game felt grindy, I’d uninstall it. Now I just watch about 2 shows a week, and ended up completely uninstalling Steam and my Windows partition as I was never using them.

Additionally, I made a list of everything I wanted to accomplish, including recurring and one-time events. For recurring events, a site like Joe’s Goals is especially useful; I keep it as a permanent pinned tab in Chrome and it keeps me honest about how often I’m actually doing the activities I say I care about. The previously mentioned activities such as cooking, climbing, yoga, reading, and Zen filled in most of the time nicely so there was little opportunity for boredom, but I also knocked out a few things I’d long had on my to-do list including:

  • taking an aerial acrobatics class
  • acquiring a proper chef’s knife and taking a knife skills class
  • learning how to raise hens for eggs and meat
  • beginning to learn Polish (I live in Greenpoint, Brooklyn)

I also took the entire month of June off and spent it visiting friends and family, some of whom I hadn’t seen in years. I ended up in York, Rochester, Austin, San Francisco, as well as upstate NYC for a week of camping with my girlfriend and her parents. I stayed with friends instead of in hotels, and used Amtrak instead of flying where possible to keep costs low. I’ve also been able to host family and friends visiting NYC on weekdays that I wouldn’t have otherwise been able to spend time with.

Downsides to Freelancing

Okay, clearly I’m pretty happy freelancing, but like most systems that offer great flexibility, you have to do a little more work yourself that salaried employment would otherwise handle for you:

  • finding opportunities and turning them into contracts
  • tracking time, invoicing, and following up on checks
    • On The Job has been a wonderful tool for this, and has a free trial.
    • I’ve recently switched to FreshBooks, as it handles invoicing and payment tracking better including automatic recurring invoices and late fees, tracks expenses, has a great overview dashboard, and most importantly can generate a Profit & Loss report which you’ll need each quarter for taxes. You can use it for free indefinitely for up to 3 active clients.
  • paying for your own healthcare and vacation. These actually turned out to be less expensive than I thought:
    • healthcare: at 40 hours per week * ~4.3 weeks per month, you can assume you are getting a bonus of $1-$3 per hour for healthcare ($172-$516/month). So working 20 hours a week, that’s $2-$6/hour you need to make up.
    • vacation: assuming 5 weeks of vacation/holiday/sick pay out of 52, that’s about a 10% bonus.

So as an example, a $100K salary, which corresponds to roughly $50 per hour working 40 hours a week, requires a freelancing rate of $56-58/hour to pay for healthcare and time off. If I wanted to work 20 hours per week using this example, I’d double that to get a required rate of $112-116/hour. I had no problem doubling my previous rate as just a starting point, so these benefits were easily paid for and is what allowed me to dramatically cut hours without a pay cut.

Healthcare is a big and challenging topic, so if you find this to be a problematic point for you, there’s a whole chapter devoted to it in the all-around very thorough book Working for Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants. The short version is that if you can get on your spouse’s plan, that’s a great option, and COBRA can also be used if affordable, and can be turned into a personal plan after 18 months. I decided to go with an individual plan, looking extensively at both and before choosing a plan from the latter.

What’s next?

Working part-time has been incredibly enjoyable, particularly having entire days off to be out and about during the least crowded and least expensive times (weekday afternoons) instead of the busiest and most expensive (weekends). As long as I can keep my pipeline full (and it looks like I’m set into 2013 at the moment), I’d love to keep shooting for about 16 hours per week, taking a month off after every three working.

I’d love to hear about your experiences in your work life, or any questions or thoughts you want to share!


Based on the questions this post has generated, I’d suggest reading The 4-Hour Workweek if you are looking for motivation, inspiration, and practical tips for quitting your job, going remote, or finding other income streams. Once you are working for yourself, the aforementioned Working for Yourself is great and covers laws, taxes, insurance, contracts, and everything else you’d need to know in very great detail!