I’m a full-time freelancer, and there are 3 things I’m doing right now to recession-proof my finances

The author is not pictured.

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The author is not pictured.
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  • I got laid off from my job at a tech startup in 2015 and decided to go full-time freelance.
  • Since then, I’ve built up a steady roster of clients and feel confident about my career. But I still need to prepare financially for the possibility of a recession.
  • To protect myself, I’m building up my emergency fund and finding new ways to make money so I’ll be relevant no matter what.
  • Read more personal finance coverage.

There are a lot of perks to being a freelancer, from working with a variety of clients to working from home in pajamas (if you feel like it). But with that kind of flexibility comes some tough-to-swallow realities, such as the fear of losing all your clients around the same time or budgeting enough money to pay for benefits that full-time employees receive (i.e. health insurance and retirement contributions).

After I got laid off from my job at a tech startup in 2015, I decided to enter the world of freelancing. For the past four years, I have enjoyed the ups and downs of working with clients and growing my career through new types of challenges.

But one thing that’s been on my mind this year, with talk of a possible recession on the horizon, is how I’d survive the freelance game if the economy took a major dip – and so did the budgets of businesses that are hiring people like me.

With that fear in the back of my mind, I’ve been working hard to figure out ways to recession-proof my finances. Here’s what I’ve been doing to get a head start on the what-ifs that could be caused by a recession in months or years to come.

Building an emergency fund

Whether you’re a full-time, salaried worker, business owner, or freelancer, a recession is stressful – you don’t know what the future holds for your finances. In my case, I want to protect myself against the slow loss of income that could occur if clients start to end their contracts with me.

One actionable step I’ve been taking since January is contributing monthly to an emergency fund. That way, if I lose my clients and struggle to find new ones, I have a savings fund to tap into to pay for my immediate needs (housing and food) while I consider my next move.

Diversifying my clients

When I started freelancing in 2015, I worked with only two clients. I quickly realized that it can be risky to rely on income from just two clients, because if they both end their contracts with you, you have to start from scratch with business development.

That’s why Andrea Travillian, a business coach, recommends diversifying your clients.

“If all your income is dependent on two or three customers, it will be harder to keep going if one of them goes under. Or even if they just need to cut back. Start building up a larger base of clients,” says Travillian.

Since the summer, I’ve been trying to work with different kinds of companies in different industries. That way, if a recession happens, I’m more likely to keep some clients since I work with people across various industries and with companies of different sizes.

Getting creative with my offerings

While the thought of a recession can be scary, one of the things freelancers can do is think outside the box when it comes to their service offerings.

If a recession happens, it’s important to be flexible with your offerings and think about different ways to use your skills. Perhaps there are other things you can do for your clients to earn money, like admin or design work, that you’ve never done for them before.

I’ve started to brainstorm alternative services I can provide and plan to hold strategy workshops with my clients at the start of 2020 to better understand their needs over the next 12 months. That way, I can stay relevant and valuable to them even through the threat of a recession.