If it seems like every other person you know is taking the leap into self employment these days, it’s not all in your head. About 400,000 more people report being self-employed in 2023 than before the pandemic, according to the Center for Economic and Policy Research.
I became self-employed well before 2020. And I can say from firsthand experience that there are numerous perks involved. I get to set my own hours, which is so important as a mom of young kids. I also get the option to say no to work I find incredibly boring. You can’t do that — or at least not easily — as a salaried employee.
But while I enjoy being self-employed, I’ll also be upfront and say that it’s not for everyone. If these signs apply to you, you may want to stick to a salaried job — at least for the time being.
1. You tend to be easily distracted
There’s a reason I try my best to take on work I find interesting. If I’m bored with a given assignment, I’m more likely to procrastinate my way through it. But when I’m interested in what I’m writing about, I tend to be hyper-productive. My husband, who works from home like I do, can tell when I’m in the zone when he walks by my desk — and he knows not to so much as say “hi” during those times.
But it’s important to be honest about your ability to stay focused if you’re thinking about becoming self-employed. If you’re someone who gets distracted easily, there may not be immediate repercussions as long as you meet your deadlines. But you’ll be doing yourself a disservice if you waste a lot of time, because it means you’ll probably be earning less.
2. You don’t like taking risks
My primary issue with self-employment is the lack of a steady or predictable paycheck. I’ve had clients bail on projects at the last minute or cut my workload due to their own budget constraints. And while that’s understandable, I can’t tell you how many times I’ve had to scramble to pick up work unexpectedly.
Now, there are a few things I do to mitigate the financial risk of being self-employed. First, I keep my fixed household costs as low as possible. Secondly, we make sure we can cover our essential bills, like mortgage and car payments, on my husband’s salary alone, and we use my income for extras, like streaming services, activities for our kids, and vacations.
But you may not have a second steady household income to fall back on. And if you don’t have a great appetite for risk, then the self-employed lifestyle may not be for you. I say this from firsthand experience, because I worry often about money despite being a pretty good saver.
Again, this is one of those situations where you just have to be honest with yourself. If not having a steady paycheck will wreak havoc on your mental health, it may not be worth becoming self-employed.
3. You don’t have a solid emergency fund
Before I became self-employed, I built up a decent savings account cushion so that if it took a while to get more clients and earn an amount I was happy with, I’d have money to fall back on. If you don’t have a pretty solid emergency fund, then I highly suggest waiting to build one before giving up a guaranteed salary — especially if you don’t have a co-earner in your household.
In fact, if it’s just you, I’d say it’s a good idea to have a year’s worth of savings on hand. Remember, you may not just need that extra money when you’re first getting started. You might also need it during periods when your workload dries up. And trust me when I say that that can happen at any time — even if you’ve been doing what you do for years.
Working for yourself comes with a lot of benefits. But think carefully about whether it’s the right move for you.
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