Freelancing sounds dreamy, right? Freedom, flexibility, being your own boss… what’s not to love? Erin often talks about her job as a professional travel blogger. But behind the Instagram-worthy laptop-in-a-café vibe, there’s a less glamorous reality waiting to sneak up on you.

Take the idea of multi-car insurance, for example. Probably the last thing on your mind as you dive headfirst into your freelance adventure—but it’s just one of a whole bunch of hidden costs that can quietly pile up before you even notice.

1. You’re Paying for Your Own ‘Sick Days’ and Holidays

The harsh reality for freelancers is that if you don’t work, you don’t get paid. You may have already accounted for the occasional sick day, but what happens when you need a real break or must deal with something urgent?

Consider putting aside a portion of each project fee for personal days. Set a schedule that allows for some time off throughout the year to recharge. Planning for your time off ensures that when you do take a break, you won’t return to a financial crisis.

2. The True Cost of Your Tax Bill

Freelancers in the UK are responsible for their own taxes. Although it can become straightforward with practice, when you first start out, it can be quite overwhelming. You have to consider the following things:

• National Insurance
• Income tax
• Self-assessment forms
• Late fees
• Pension contributions

You often also have to factor in an accountant or bookkeeping software if you want to stay organised. Investing in accounting software for self-employed people can help track all income and expenses in real time. Alternatively, hiring an accountant may save you money in the long run.

3. Equipment, Software, and Insurance Expenses

As a freelancer, you’re also responsible for all the tools you need to do your job. These might seem like basic requirements, but once you add them all up, it can be significant. On top of that, you may need to invest in specific software licences or professional tools that help you stay competitive.

Insurance is another cost you can’t overlook. Professional indemnity, liability, and even multi-car insurance, should all be on your radar.

4. The Expenses of Getting Around

If your freelance job requires travel, transportation costs can add up quickly. Think about how much you spend on travel. If you’re using your car regularly for work, consider the additional costs of insurance and maintenance. Whatever the situation, it’s important to budget for these costs, especially if travel is integral to your business.

5. The ‘Unbillable’ Hours You Still Have to Work

Freelancers can often spend hours every week on ‘unbillable’ activities, yet they’re crucial to keeping your business running smoothly. To manage this, try creating a more efficient routine. Set aside specific hours during the week for these tasks and avoid letting them bleed into your productive hours. You may also find that outsourcing or automating some of these tasks, like invoicing or social media scheduling, can free up valuable time for paid work.

These decisions may cost upfront but can be worth it if they increase your overall productivity and, in turn, your income.