May 21, 2019
A freelance writer in one of the private Facebook groups I’m part of posed the question to the group about how writers calculate their “actual” annual salary, factoring in how much they are earning, health insurance costs, self-employment taxes freelancers pay in addition to the tax bracket rate you’re in, expenses you can deduct for your business, and those hours you don’t get paid for, like writing blog posts, marketing, finding new clients, bookkeeping, and so on. I thought it was a great question and one I could lend my experiences with to help others set better freelance goals to make more money freelancing.
Whether you’re freelancing as a side hustle or earning a full-time living wage as a freelance writer, I think it’s important to set annual goals and break that down into monthly, weekly and daily goals so you have an “average target rate” to aim for. It’s also important to revisit that earnings goal to see how well you’re doing and if you need to make modifications to that initial number, or if you need to kick your butt into high gear for the rest of the year.
Here are some tips to consider when setting your daily or weekly freelance rate.
A few years ago, I used to aim for an average of $250 a day when I was living in my Manhattan apartment. That was probably because the part-time, in-house gig I worked at offered a day rate of $250 so I wanted to make at least that when I was home freelance writing the other three days. I calculated my monthly expenses for rent, health insurance, utilities, groceries, and basic bills put me around $2,800/month that I needed to spend, so while that $250 was gross pay, I factored it was really about $175 after taxes. (Remember, your income shouldn’t be your only measure of freelance success. Here are other ways to measure your success as a freelancer.)
As a full-time freelancer with goals of hitting a six-figure freelance income again this year, I’ve changed up my daily goals and think of my income as a monthly average or three-month average I like to hit. (Experienced freelancers often work on larger projects that have staggered payment fees so you might get paid $5,000 one week and then not paid again by that client for another few weeks.)
If my goal is to earn $100,000 gross by the end of the year, I need to earn $1923.07/week (if I don’t take any weeks off). If I want to take two weeks off, that’s $2,000 a week gross I need to be billing clients.
I suggest you identify a financial number that you’re aiming to earn monthly or quarterly and keep an eye on that so you know when you need to work on drumming up business. When I notice that all of my freelance assignments have been paid and business is slow, I know that I need to start pitching editors ideas. (I can show you how to turn your article ideas into paid assignments in my freelance writing e-course. Enroll today!)
If you want to make six figures as a freelance writer, it’s possible to do, but you’ll need to aim for a higher hourly rate and higher-paying assignments, or, commit to working more hours in order to reach a goal of making $100,000 as a freelance writer. This is why it pays to spend time finding higher-paying clients. Writing 500-word articles for $50 a piece right now? That’s fine in the beginning but to hit that $2,000 a week you’ll need to write 40 of them a week. I don’t know about you but that’s not sustainable for my fingers, hands, eyes and sanity! (If you’re ready to graduate to better-paying clients, get details about my one-on-one freelance coaching services here.)
Even experienced freelancers don’t like to think about paying quarterly taxes, but once you’re freelancing full-time it’s a good idea (maybe even required). Small business owners and entrepreneurs know, it feels even more painful to have the pay the government out of money that’s already been deposited into your bank than when it comes out of your check automatically. In the past, I’ve paid between $2,500 to $3,000 quarterly in estimated taxes. Again, back to the numbers — that’s nearly a week and a half of income each quarter that’s just going into my “taxes” bank account. (Beware these time management mistakes.)
The question of whether freelancers should ever take on lower-paying assignments is a popular one explored online, and I think it depends on how much time you have and the rate being offered. Remember, print magazines often pay a higher rate, but the writing and editing process can take a long time, and then sometimes you don’t get paid until the issue goes to print or it’s officially on newsstands. This means you might not see the $3,000 check for that assignment you turned in to your editor last February until August. I don’t think beginner and intermediate freelancers should only hold out for larger, higher-paying assignments unless they have a large safety net. This is where having a few steady clients with projects you get paid for monthly helps keep you afloat. I occasionally take on lower-paying assignments if an editor comes to me with the idea or it’s a topic I really want to write about and I have time. I think of it like getting paid to talk to an interesting author, learn something new, or get a different clip that I’m proud of.
What’s your daily rate goal? Or, do you have a weekly or monthly freelance quota you try to hit?
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Tags: freelance rates, freelance writing jobs, freelance writing tips, making six figures freelancing, online course, productivitiy, productivity, six figure income, time management, work at home, work from home, writing rates
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