The pandemic has catapulted capitalism into an unknown future, and the gig market is taking notice. Layoffs due to the pandemic have created a fierce need and competition for contract work, and women in particular are entering that market: 11.7 million women lost their jobs between March and April, compared to 9.6 million men. women lost their jobs, compared to 9.6 million men. However, recruitment surged in the freelance field, one of the few sectors that has prospered as a result of the national crisis. This year, 2 million people have joined the approximately 57 million Americans who already identify themselves as freelancers. And this shift shows no signs of slowing down. So if you've recently become a freelancer, don't panic. We're here: here's a guide to freelancing.

The transition from a steady paycheck to a project-by-project paycheck can be stressful (for you and your wallet). We tapped Jackie Lam, creator of the website Hey Freelancer, to help you manage it all.

Income highs and lows are a not-so-beautiful reality of the lifestyle. Salaries fluctuate from month to month, making budgeting difficult. To make matters worse, the average bill is paid 45-90 days after you finish a job. Start your planning by listing all of your fixed monthly and annual bills and figuring out the "nut," which is the amount of money you need to make ends meet. Jackie Lamb suggests reviewing your spending plan and identifying areas where you can cut back.

Create an account dedicated to business expenses, such as website domain maintenance, and an account for rent, food, and fun. By keeping them separate, you can handle them seamlessly when tax season comes around.

Now that you are freelancing, you will have to handle your own taxes (for full-time staff, your employer will withhold and pay a portion of your taxes). At least 30% of every paycheck you are paid goes toward your taxes. To avoid penalties, file taxes quarterly using IRS Form 1040-ES.

If you use your home as an office, you are eligible for a tax credit. However, the deduction applies only if your home office is a separate space dedicated to your business, not a couch or bedroom. Talk to your accountant to better understand your options. Doing so could save you from calculation headaches and potentially a large amount of cash.

In any contract, an initial deposit of 10-25 percent to reserve your time, or a cancellation clause (sometimes called a kill fee, often 25 percent of the total fee) that you can get if the project fails A detailed description of the money you will need up front to negotiate. Make sure you know who will be responsible for work-related expenses, such as travel and telephone costs, before you incur them.

Just kidding. But you need to plan for this, as you will no longer have a guaranteed income during sick leave or vacation. If you need $4,000 a month for living expenses and want to take four weeks of sick leave and vacation time each year, you need to save $4,000, Lamb says.

This article was originally published in the Winter 2020 issue of Marie Claire.

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