Self-Employment: Working from Home, the New Trend

Recent events caused many people previously employed through companies to rethink their future. A loss of earnings created by the lockdown took a toll on finances and mental health. People now want more control over their lives and its outcome. As a result, self-employment is becoming a new trend that shows no signs of slowing. If you are thinking about working from home for yourself, below are a few things to consider before making your final decision.

Working from Home Options

It’s a wonderful thought to work from home. You gain an abundance of freedom. However, can you afford it? If your educational background supplies the means for independent work, then it’s a good fit. Freelance writers, consultants, tutors, and real estate agents are a few choices available.

Money in the Bank

You need savings initially for self-employment to cover business and personal expenses. You also need good credit. Having good credit will improve your chances of getting an approval for a personal loan.

If your credit is poor or fair, there are ways to increase your credit score to a good status. For example, reducing your debt will improve your debt to income ratio resulting in a higher score. Work on this now prior to leaving your current employment. 

No Paid Benefits

Unlike working for an employer, self-employment doesn’t provide the benefit of paid time off. If you want to go on vacation or miss a day of work, you will do it without payment. You also won’t have medical insurance or retirement benefits. If you get sick, you’ll need to pay to see a doctor out of pocket or secure your own health insurance. If you want money in retirement, you’ll need to start your own 401(k) or Roth IRA.

Plan Events

One of the most attractive benefits of self-employment is the ability to plan events. You can attend a school play, go on vacation anytime and make an appointment mid-day during the week. You don’t have to ask your boss if you can have the time off, you simply plan it. 

Unlimited Earnings

Unlike working for a company, you can make as much as you want. Your earning potential has no limits. If you have a special event coming up, you work harder to secure the funds. You are in full control of what you earn. You find new clients and higher-paying jobs. This is where your good work ethics really pays off.

Finding Clients

One drawback to self-employment is the need to find your own clients. Initially, this can be difficult. If you are a self-starter and resourceful, you’ll land clients within the first few months. Finding clients who pay timely can also prevent you from success. If you don’t receive payments within 30 days, you can fall behind on necessary expenses.

Reduced Expenses

Working from home eliminates many of your current work-related expenses. You won’t need to fill up the gas tank weekly, order lunch or pay tolls. You also won’t need major repairs on your vehicle as often. Your wardrobe is no longer dress, eliminating the need for continuous updating, saving you hundreds or more annually. If you want to wear sweats or even PJs, it’s possible. 

The Home Environment

On the outside looking in, working from home appears perfect. Your commute is a few feet from the bedroom. Working from home comes with many distractions. If you have children or pets, they need monitoring and attention. Suddenly, the neighbor who likes to futz around in the garage with power tools is annoying. Your home can also cause you to lose focus. You see dishes in the sink and dirty laundry and stop work to tidy things up. When you work from home, you must create balance. Having a separate room for your office is ideal. When you close the door, you’re at work.

Self-employment comes with many benefits. However, there are drawbacks too. Weight them carefully prior to leaving your current employer.

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