The Finances of Freelancing with Will Paybarah, FinGym Client
On this episode of Financially Naked: Stories from The Financial Gym, our host is FinGym Client, Will Paybarah who has a full time job and is also a freelancer. He is joined by his friend Scott, a full-time freelancer, to discuss the freelancing industry in relation to finances.
Podcast Notes
Will has a full-time job and side hustles as a graphic designer in his spare time. He designed the logo for this podcast as well as a rooftop mural at the New York Financial Gym location.
Scott is a full-time graphic design freelancer, based in Arizona. Scott originally thought he was going to be an artist. During his junior year, his high school offered a graphic design class and he fell in love with that more than art. Scott decided to pursue it further at Arizona State University (ASU) and continue his education at the Type@Cooper program in New York City. Scott got into design earlier than most.
During his sophomore year at ASU, Scott started Project 365, where he drew a new piece of lettering every day for an entire year and posted it on Instagram.
The project was a way for him to explore lettering and take a break from his class work. He always thought he would work for a studio, and this project led him into full-time freelancing.
A lot of Scott’s clients came from Instagram. This was before Instagram changed their algorithms, and people saw his work every day. Most clients reached out via email and it continued from there.
Scott’s career trajectory fell into his lap. He had a full-time job at an ad agency in Phoenix, but he realized he wanted to move to New York for the Cooper Type program. In 2015, he had to decide to say goodbye to his job or the program, so he quit his job. He has been full-time freelancing ever since.
Will works a full-time, nine-to-five job and freelances on nights and weekends. This means he takes on smaller projects and quick jobs, where Scott takes on bigger projects.
Every project is different. Recently, Scott did a small, tee shirt design project, which he charges between $250 and $500. Thanks to his social media following, his clients have seen his work and he is getting larger projects.
He has done projects recently for Game Seven Marketing for Oakley and the NFL. The budget and timeline for these are particular to the project. Since this one had a tight turnaround time, he was able to charge a rush fee on top of the project rate.
Negotiating the rate is not something that is set in stone. It depends on the designer’s background, years of experience, and what they bring to the table. He has reached out to others in the field to understand the correct ballpark to price projects, but a lot is trial and error. If there is a project he doesn’t want to do, he charges a lot of money.
Every time Scott sends a quote to a client, he second guesses it. With graphic design, there is more of a flat rate for pricing, but with lettering there is more involved, which raises the price. Don’t be afraid to charge too much, but having flexible rates is important.
Scott doesn’t put any money away for retirement right now. The general rule is to save about 30 percent for taxes, and he typically owes $4,000 or $5,000 every year. On a good year, he paid about $15,000 in taxes. You need to prepare for the worst. If he has extra money, he spends it on a trip
If you are thinking about being a full-time freelancer, test the waters by doing it on the side. Try to take on more and more until freelance income overtakes the full-time income. Freelancing can take a toll, because it is stressful. You need to make sure it makes sense for you long term.
Scott’s bread and butter is typefaces he creates and sells. There are teaching platforms, like Skillshare, where you can teach others your craft.
Scott currently has one typeface for sale and two online courses. A typeface takes about one to two years to create. He makes about $300 to $400 a month from these products. Will makes about $100 a month on one online class.
When Scott was in between projects a few months ago, he reached out to past clients and reminded them of his website and checked in with them. He promotes himself on social media as well. In addition to taxes, Scott’s savings is there in case a dry spell comes up, so he doesn’t go into debt. He expects a dry spell every November, December, and January, because clients run out of their budget by then.
Some freelancers put money in a bank account and pay themselves a set amount each month. Scott puts all of his earnings in a checking account and hopes for the best.
Recently, Scott moved into a coworking space, and that has brought in an extra $15,000, because he is in a community of other designers who can pass work on to him. He pays to be there, but it is worth it mentally and financially.
Years ago, before he used contracts, Scott had one client that took a year to pay. It was only a couple hundred dollars. Since he has been a full-time freelancer, he uses contracts and is able to take legal action, if necessary.
Will and Scott both charges a late fee for projects. Scott pays a monthly fee to use a site called Bonsai. He can create and send contracts, invoices, and many other things.
Depending on the client, Scott charges 50 percent at the beginning of the project and 50 percent at the end, and he usually gives clients 15 to 30 days to pay.
Scott has an LLC that he uses during tax time. He signed up for one about a year ago, because someone wrote a check payable to his website name and he couldn’t cash it.
Keep trying things out and take on every project you can when you are starting off.
Resources Mentioned
Bonsai: hellobonsai.com
Instagram/Twitter: @youbringfire
Website: youbringfire.com