Freelancing: How to cope with the cost-of-living crisis
26th Sep 2022 Managing your Money
Freelancing can be rewarding but it can also be precarious. With the cost-of-living crisis upon us, how are freelancers coping with rising costs?
Nearly 50 per cent of adults living in Great Britain struggled to pay their energy bills last month, and 90 per cent reported an increase in the overall cost of living.
With 4.25 million freelancers in the UK, it's one of the most affected demographics with the worst job security, no employer-sponsored health insurance and zero paid leaves. The cost-of-living crisis is worse when you’re already struggling to pay your bills in a normal economy.
It's even harder when clients don't pay on time
Take, for instance, Sue Cade, a freelance video producer, copywriter and PR from Devon, who is divorced and manages a single-income household. Sue worked through her pregnancy to avoid missing out on her pay check but was forced to take time off this July when she got COVID. She’s worried about how to manage the rising energy costs if she’s losing work while the cost of living keeps increasing.
"The cost-of-living crisis is worse when you’re already struggling to pay your bills in a normal economy"
“I live rurally, and my house is multi-fuel,” she says. “Working from home has an impact on the increase in energy costs, and my electricity usage soars when my kids are home from uni.”
The problem compounds when clients don’t pay on time, something that nearly all freelancers experience. “I often moan to friends and family about waiting to be paid for jobs, with them all being shocked that months have passed without payment in some cases, but this is so normal when you're a freelancer,” says Shona Louise, a St Albans-based freelancer working as a photographer, writer and accessibility consultant in the theatre industry. “It makes everything so much more stressful because it's difficult to budget when you literally have no idea when you're going to be paid.”
Looking for alternative streams of income
Freelancers like Sue and Shona are finding themselves making several sacrifices to absorb the rapidly rising cost of living. “I’m applying for more typical 9–5 jobs, despite knowing that they don't suit my disability,” Shona says. “When you have a really bad month as a freelancer it's hard not to wonder if you should pack it all in for some job security.”
It's hard to find time to take on more work, especially for freelancers balancing work with other commitments
It’s tempting to think taking on more clients will bring in more money, but that’s not always realistic for a freelancer. “I'm working more and taking on more clients, but I still only have the same hours in my working day,” says Claire Chircop, a freelance parenting blogger based in Middlesbrough. “I'm a parent from 5am to 9pm, and a freelancer from 9pm to whenever I drop.”
"When you have a really bad month as a freelancer it's hard not to wonder if you should pack it all in"
Even if freelancers do find the time and energy to take on more work (by working extra hours during evenings and weekends), the additional cash flow is only enough to balance out the “drought” periods where work dries up, says John Kavanagh, a freelance web developer based in Brighton. But like Claire, there’s only so much you can add to your plate when you’re managing care responsibilities. Unfortunately, this can push freelancers out of the industry.
“If a freelancer is financially struggling and isn't in the fortunate position of being able to take on additional work to cover the rising costs of living, then the answer may simply—and sadly—be to look at alternative streams of income,” John says. “That may be a permanent job, or a part-time job, delivering for Amazon or Uber Eats.”
Saving creatively
Finding creative ways to save is a common piece of advice for freelancers
For those intent on making freelancing work, one of the most common pieces of advice offered by other freelancers is to save more. And not just money! Freelancers are coming up with creative ways to save water and energy as well. For example, Claire has reduced the number of times she washes clothes and reuses the water to clean pots. She has also started walking more to save fuel costs and shopping for second-hand clothes to save money and reduce waste.
Cade has turned to online meetings to save fuel and travel costs and suggests using co-working spaces to keep the home energy use down. Some have also considered moving to a cheaper region where the cost-of-living crisis is not as bad.
"Freelancers are coming up with creative ways to save water and energy as well"
On the work front, Elodie Gythiel, a London-based freelancer working on search marketing projects, suggests, “One way to survive a cost-of-living crisis is to find clients that don’t suffer from the cost-of-living crisis.” This could be energy companies or agencies serving such clients, she says.
However, none of these are sustainable, long-term solutions. Cutting back on expenses isn't enough to solve the cost-of-living crisis. “Kirstie Allsopp famously made some very poorly-informed comments about younger generations simply needing to cancel Netflix and stop eating so many avocados in order to afford their first home, but the savings you would make don't even scratch the surface,” Kavanagh says. “There are no easy solutions.”
Keep up with the top stories from Reader's Digest by subscribing to our weekly newsletter