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Hazards of Freelancing: The Hidden Costs of Freelancing

I hope I will never need to work in an office again; the past 10 years of freelancing have spoiled me in many ways, above all with respect to determining my own schedule, which is different every day. I am grateful beyond words to be able to work from wherever I wish (which can also be different every day) and to be able to have my husband and our children close, to have the freedom and flexibility to be spontaneous with them and on my own, too.

That being said, there are some drawbacks of freelancing that wear on me more as the years go by. I wanted to take a look at some of them this week in a series of posts about the hazards of freelancing.

My first post in this series is about the hidden costs–and by “costs” I’m referring to quite literal expenses–of being a freelancer.

These costs are nothing new to me, but recently, I’ve been acutely aware of how onerous they are. And the particular burden they’re imposing on my life compels me to wonder why, in an age when so many people (at least in this country) have untethered themselves from cubicles and biweekly paychecks, our institutions can’t seem to find a way to manage us and certify our existence without a pay stub.

How very 20th-century.

Back in 2007, I moved to Mexico to establish residency and battled with Immigration to explain my financial situation. Though I exceeded the total annual income required to be granted residency, I could not prove this with pay stubs, which Immigration insisted were necessary to substantiate that I wouldn’t become a burden to the country and its government.

Quite simply, I didn’t have pay stubs. I also didn’t receive the same amount of money every quincena (every pay period). I tried to explain the concept of freelancing (“cuenta propismo” in Spanish), but it didn’t matter. The system was set up to handle only those applicants for residency who could conform to the requirement requests being made of them, that is, people who held “stable” office jobs with biweekly paychecks cut with the same sum each pay period.

Though I was ultimately able to establish residency (the “how” of which is too long to explain here), I’ve realized that the problem of substantiating my earnings is a problem here in the States, too.

Our daughter recently started pre-school. An expensive pre-school. Thankfully, the school offers some modest financial aid and a monthly payment plan, but guess what? It too wants to know what our biweekly income is and, not unreasonably, school administrators want us to pay a fixed sum on the first of each month.

The problem with this system is that it’s not at all flexible. It doesn’t acknowledge that a growing number of parents may have the means to pay for their child’s education, but that those means aren’t always available in the same sum or on the same day.

As a result, we are penalized financially. If we don’t pay the full tuition payment on the first of the month, we’ll be levied a $40 “administrative fee.” (read: late fine). We’re already three months behind on the tuition payments because our daughter was a late admission to the school and the tuition payment plans started in June. I suppose there are plenty of parents who happen to have three months’ worth of tuition lying around, but we’re not among them.

Preschool tuition payments aren’t the only place where we’re feeling the squeeze of such fees. As freelancers, so much of our income flow follows a “feast or famine” pattern. We may be quite flush this week, but close to flat broke next week. And that’s not because we’re bad at saving or financial planning; it’s because we tend to have to pay all of our bills at once. And inevitably, as we’re waiting for checks to come in from clients and publications, we’re racking up at least a few late fees. Even when these fees are “modest” (ie: $5), they add up… and fast.

There are other hidden costs of freelancing. Many of us, for example, have to bear the cost of incoming wire transfer fees when we receive payments from clients outside the US, or fees collected by third-party agents like PayPal when payments are rendered through those platforms.

And that’s not all.

For those of us who are published book authors with foreign editions, we’re often losing part of our advances in international taxes (which may or may not be recovered when we do our own taxes domestically the following year. Either way, keeping up with these accounts is, frankly, a major pain in the ass).

And have I mentioned research? I recently had to pay $8 to access a magazine via iPad for which I had an assignment because I wanted to see the style and format of the department for which I was writing. I would have gone to the bookstore and flipped through the magazine on the rack, but it wasn’t available. And the editor didn’t respond to my request to send me a PDF of a single page of the magazine (which, by the way, is not available online). If I tabulated my research costs (not to mention the expenses involving travel for publications that don’t pay expenses–which are most of them) the confined space of the office cubicle might look better than freelancing after all.

What other hidden costs of freelancing are you taking on and how are you managing them? I’d love to hear from you in the comments.


3 responses »

  1. Don’t forget that we also have to pay the employer’s share of Social Security taxes on top of our own share … Also, for me, nonreimbursed travel expenses have more than a financial cost. They mean I take more “desk” assignments than I would like — you know, the “10 best” and “20 most” lists and slide shows that websites and an alarming number of magazines are in love with these days. Those jobs subsidize travel for the stories I really want to write.

    • Julie Schwietert Collazo


      I had really hoped I’d remembered all those hidden expenses, but I’d forgotten these two. Major sad face.

  2. Pingback: Hazards of Freelancing: Freelancing Ourselves into the Oblivion of Neglect | Cuaderno Inedito

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