Observations from exercise, cooking, literature, and other disciplines that apply to business and life.

The thought didn’t occur to me when I graduated college. At that point the task appeared simple enough. Scour job boards every morning, craft cover letters, attach resumes, and get a job. Only it never worked out that way. True, I wasn’t as diligent as I could have been, but after a year of job seeking I had come up with nothing but a part-time gig at a music shop.

Then came a break. For reasons I wouldn’t understand until I was in too deep, a local publication wanted to hire me as an assistant editor. At the time it sounded like a dream job. Start small with this local rag, perhaps work my way up to editor-in-chief, and then move up in the ranks of magazine editors. The catch: while I was expected to go into the office and work full-time hours, the company would treat me like a contractor. No taxes withheld, no benefits bestowed.

It was only after I realized the boss’s reason for hiring me — he thought he could mold me into an ad sales guy rather than an editor — that I found an actual job with actual benefits. That job tanked quickly, too, thanks to a boss who treated us like servants rather than employees. A day after quitting, I agreed to a new position. From freelancer to employee and now back to freelancer, all within the span of 10 months.

While the position was aimed at long-term employment, it still worked on a freelance basis — even more so than the first job. I had to take action in order to get paid; a paycheck would not be waiting for me every two weeks. Since the position was intended to be long term, I had to think about things like setting aside tax money. Overall the new position provided a wakeup call. I consider myself much savvier now that I’ve been through those trials.

The three biggest lessons I learned as a freelancer are ones that will stick with me no matter what path I pursue in the future.

You can be obnoxious when you’re owed money

In a way my freelance gigs put me in an envious position. Instead of getting paid on a per-project basis, I got paid bi-weekly in the same way an employee does. Oftentimes freelancers must live below their means, because they don’t know when the next paycheck will arrive. A freelancer making $40,000 per year might have to live like someone on $30,000 or less, because payments come erratically.

Even with a bi-weekly payment schedule, I still needed my employer to cut me a check. At first it wasn’t easy. I’d send the invoice, but it would linger and linger. Soon enough we’d be approaching another pay period, and I’d be living on Stouffer’s French Bread Pizza and ramen noodles. I could afford more, but just didn’t have the cash on hand. Eventually they’d cut me my check(s), but the process got annoying.

After a few months of this (also having proven my worth to the company), I started to speak out. A check mailed Friday, invoice day, would arrive by the next Tuesday at the latest. If it wasn’t there, I’d start chirping on Wednesday morning. It started with, “sorry to be a bother,” but I soon cut that line. No, I’m not sorry. I performed my duties. Now it’s your turn to uphold your end of the bargain.

Never feel shame about asking for money you’re owed. The more passive you become, the longer you’ll wait to get paid.

Have an invoicing and payment system in place

With no experience in a traditional freelance atmosphere, I was at a loss when my boss asked me to send an invoice for payment. What? You mean you don’t just cut me a check every two weeks? And so I did what any internet-savvy 20something would have done: I googled “invoice template” and clicked on the first result. That’s when the problems started occurring.

Of course, the first result brought me to a page that, without saying it directly, allowed me only five or six free invoices before starting to charge me. Great. That meant I’d have to change templates. A MS Word template would have worked, but at that point I didn’t have Word on my computer. And so it was onto another invoice template. Keeping track of invoice numbers became a pain for both mine and my company’s records.

The solution came in the form of PayPal, but that soon proved to be a bust. You’ve surely heard complaints about PayPal, and I can’t say I disagree. I wish I’d found a PayPal alternative like WePay at the time. It would have saved headaches.

The overall point: make sure you spend time finding an invoicing and payment system that works for both you and your company. Otherwise you’ll spend even more time, and grow even more frustrated, trying to get paid on time.

Save more than what you owe in taxes

When I became a freelancer I knew I’d have to save money for taxes. That’s why I set up not one, but two savings accounts — one for savings, one for taxes. But a guy in his mid-20s living with two close friends can blow through money like none other. And so the money leaked out of my accounts, leaving me with little left for taxes (and nothing for savings). Trust me when I say you do not want to be in this position.

On April 12th I finally realized it: I didn’t have enough in my savings to pay the tax bill. Which is crazy, if you think about it, because that also included my income from the first three and a half months of the new year. The only solution I knew was to borrow from my parents, promising to pay them back by May 1. And so on May 1 I cut a check, saw an empty bank account, and wondered how I’d pay next year’s taxes.

Temptation to spend is high, especially when you’re getting paychecks without taxes deducted. It takes great discipline to avoid spending that money, but it’s a necessity. While I always recommend setting up a savings account with a (relatively) high-yield bank like Capital One 360 (formerly ING Direct), I also know that it’s easy to pull money out of that account at will. Freelancers need to discipline themselves so they have the cash to pay the taxman.

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