As of last month, I have officially been full-time self-employed for a full year. I started freelancing alongside a more traditional W-2 job that offered the kinds of benefits we all expect from a full-time white-collar job.
For example, I had employer-subsidized health insurance coverage, and when I left that job, I was shocked by the sticker when I jumped on HealthCare.gov to see how much a self-funded market plan would cost me. The same goes for the complexity of my tax situation: I chose to hire a tax professional rather than try to file my returns myself via tax software, but this remains a new additional expense.
But perhaps the biggest hurdle for me as a freelancer (and even small business owner) has been accepting that I have to take time off from time to time – and that I would no longer have paid time off provided by the employer. Fortunately, I found a solution.
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Save money here and there
I'm writing this after returning from a well-deserved vacation (even recovering from surgery at the start of the trip). I can no longer pretend to be some sort of superwoman who doesn't need to disconnect from work and recharge every once in a while – the proof was in the pudding (I slept better on vacation than on vacation ). years).
I admit that the prospect of making a few small salaries while working fewer hours makes me nervous, though (and given the time I spent in a low-paying career and living paycheck to paycheck). otherwise, it's not so surprising. ). So towards the end of 2023, I came up with a plan.
I did some math and came up with a dollar figure that represented a few full days of work at my regular hourly rate, and I spent the last two months of 2023 accumulating that amount in my savings account. I knew this was just a starting point, and since I reached this initial savings goal before the official start of 2024, I was able to put several hundred dollars more into my “PTO Fund “. I hope to add more, maybe $50 here, $100 there, until I can cover at least a full week's salary with the fund. And best of all, I'm saving money that I already took out in taxes, which will allow me to reimburse myself for my time off without having to worry about owing Uncle Sam.
My high-yield savings account makes it easier for me
My vacation fund is an example of how relying on the right bank account can make your life easier. I opened a high-yield savings account with an online-only bank almost two years ago, and I love it so much. I can create up to 30 sub-accounts within my main account, which has helped me save for quarterly tax payments (self-employed life!), buying a house in 2024 and vacations like the one I just returned from.
When I decided to save this money, I created a new sub-account, set an initial goal, and started saving. My bank sends me emails updating my progress, and I even get a “congratulations” email when I reach a savings goal. This is all very encouraging, and if you're struggling to save money, having this kind of extra motivation might help too. Plus, my bank has a great mobile app, so I can check my PTO fund anytime and from anywhere.
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All things considered, I love being independent: I set my own schedule, I choose my own work, and relying on that style of work has brought me the kind of financial success I've never had previously. However, the lack of paid time off is definitely a downside, so I'm really glad I was able to do it myself. If you're in a similar employment situation, I recommend making it a priority – your future self will thank you.
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