Freelancing as a self-employed worker has many benefits, including complete control of your time. When you’re sick or want to take a vacation, or when you need to deal with a family emergency, you aren’t at risk of losing your job, and you don’t have an irate boss to answer to. The flip side of this is, when you work for yourself, any time not spent working is time you’re not being paid. Many freelancers I know bemoan the fact that they feel guilty sacrificing paid time for things like kids’ parties, family vacations, holidays or even downtime to rest when they’re sick. In fact, many freelancers work 7 days a week, through holidays, through illness – basically all the time in order to avoid missing their financial goals. However, with a little pre-planning and long-term goal-setting, you can work out a schedule that will allow you to pay yourself for sick time and vacation days.
Decide how much money you need to earn. This amount should be factored yearly; factoring it weekly won’t work for this purpose, and factoring it monthly doesn’t give you extended periods of time off, such as for vacations or for flu season. I’ll start with my own base amount: let’s say that I want to earn $48,000 per year, or $4000 per month, with my freelance work. This is my actual goal for the coming year, so this is not a theoretical exercise!
Divide this amount by how many weeks out of the year that you want to work. Perhaps you’d like to pay yourself for two weeks of vacation time and one week of sick time. Since there are 52 weeks per year, that would leave you with 49 work weeks each year. You would divide your yearly goal, $48,000, by 49, the number of weeks you want to work to achieve this amount. In order to meet your financial goals and still give yourself three weeks of paid time off, you would need to earn $979.59 per week, or $980 rounded up.
Deduct any weekly unearned income you receive from this amount, such as child support, alimony or disability insurance, that you are counting toward your annual income goals. For example, if you receive $100 per week in child support, you’d subtract $100 from your $980 weekly goal and be left with $880 as the amount you need to earn from your work in order to meet your goals while paying yourself for time off.
Divide this amount by how many days per week you want to work. In this example, if you aren’t counting any other income and you want to work five days a week, you would divide your $980 weekly goal by 5. Your daily goal would be $196. If you worked five days a week and earned that much every day, you would be able to take three weeks off per year and still make $48,000 per year. If you want to work six days a week with fewer hours per day, you’d divide $980 by six and get a daily goal of about $164. If you wanted to work fewer or more days per week, the formula would stay the same.
Self-employed freelancers are just as deserving of paid time off as those with traditional jobs. It’s just that when you work for yourself, you have to be the one to give yourself the time off. Don’t be a slave to your freelance lifestyle. Budget your time for much-needed time off, so that your income isn’t totally waylaid by a last-minute emergency, and so that you have plenty of time for yourself and your loved ones. Your family, finances and mental and physical health will thank you for it.