Finance and Skillsets: Things to Consider Before the Next Global Crisis
It's already been proven—we work hard and the "system" is hardly working with us.
According to an October 2019 study by Upwork and the Freelancers Union, freelance workers contribute $1 trillion to the economy. Yet their careers are often treated by policymakers as fun little hobbies meant to fill time until a “real” job comes along.
This is far from the truth.
Freelance jobs have been proven to be the foundation of full-time work for many workers worldwide. With an eagle-eye on the economy and crisis in the United States (for example), the government, policy makers, and various supportive organizations are beginning to realize how sudden economic downturns and this recent crisis impacts freelance workers. There have been some attempts to help alleviate the hardships experienced, but are these attempts enough going forward?
“Freelancers are facing one of the most difficult times in modern history,” says Rafael Espinal, president of the Freelancers Union. “I don’t believe government has caught up to how we can be helpful to that population.”
In some ways, the financial precarity many Americans are now facing is “business as usual” for everyone who depends on contract work to make ends meet. Clients come and go, flush months compensate for lean ones. Hopefully, through it all, a savings account builds.
Still, if you’re one of the 57 million Americans who make up our freelance workforce, the year 2020 has not been easy, nor will it get any easier.
In the meantime, it's up to us (freelance writers and digital nomads) to take control of our future as best as possible and continue to come out resilient—like we try to do every month with our remote hustles.
Moving forward, let us take a glimpse at some tips to help cushion the next anticipated (unknown) blow:
Analyze Our Finances
If you’re one of those fortunate "prepared" freelance writers, you already had enough money saved up in your emergency fund to get you through this past (and continued) crisis. A good rule of thumb is to have 3-6 months’ worth of income in the bank. If you live in an expensive area, or have kids or other family members to support, it’s “often beyond,” says Douglas Boneparth, president of Bone Fide Wealth, which specializes in financial planning for freelancers.
No matter how much (or little) savings you have, you should take a serious look at your expenses and start cutting back immediately.
“Do everything you can to increase cash savings and liquidity to prepare yourself,” Boneparth says.
It may be tempting to tap into retirement accounts early, including 401(k)s. But Boneparth cautions that, “People take the biggest step backward when they start to erode long-term savings for the sake of survival.”
Some freelancers may have no choice, but it helps to be aware of tax penalties when withdrawing from these accounts, and at least for your own peace of mind, have a plan for continuing to save once things get back on track.
If you’re part of a union or professional organization, don’t be shy about checking in with them to see what kinds of assistance are available to you. “We’re at the beginning of planning a relief fund to provide immediate cash to freelancers in dire situations,” Espinal says.
Modify Our Skills
Freelancers have always been hustlers, but Covid-19 is making them hustle even harder.
“I’m seeing freelancers being very creative,” Espinal says. “Fitness instructors are using YouTube videos or Instagram, makeup stylists are giving tutorials on the internet … ”
As freelance writers, we need to do the same. Let's take some time and reconsider: Our current client base
Needs we've filled for them in the past
How we can be of help in other ways.
If you’re a freelance writer who writes regularly for a company’s blog, perhaps you can pen a newsletter about COVID-19 developments that goes out regularly to reassure their clients.
"Things are moving fast," Espinal says. “It’s important to take it day by day.”
Tutors, for example, may have felt they were facing dire straits when “social distancing” began a couple of weeks ago. But now that schools are closing, they’re in high demand for parents keen on home-schooling their kids.
Platforms, such as Behance, Upwork, and Fiverr list creative jobs that can mostly be done remotely, while TaskRabbit is more likely to advertise one-time gigs that need to be done in person. So, keep this in mind if you must remain remote.
In conclusion, you are not alone. Yes, there are many support systems and entities that recognize our labor is a "real job" and needs the same amount of considerations during downturns, if not more. Nonetheless, it is our task to remain creative, flexible, and responsible with our personal progress and abilities to sustain.
James Wilson is a Contributing Author, Marketing Expert, and Non-fiction writer.
