5 Ways to Find Start-Up Money for Your Freelance Career

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You've heard the advice, ad nauseam: if you want to turn freelancing into a career, you need to have three to six months of expenses saved up, plus start-up costs, before you take the leap. That sounds practical, but how are you, a normal working person -- not a lottery winner or a trust-fund baby -- supposed to make that happen?

By using the smarts that will make you a success once you're a full-time freelancer, you can find the funding you need.

It's all a matter of rearranging finances and your schedule to reflect your new No. 1 priority: being your own boss and making your freelance dreams come true.

5 Ways to Find Start-Up Money for Your Freelance Career

Here's where to start looking for the money:

1. Cut expenses.

If you've never made a basic household budget, now's the time to start. Budgeting is not most people's idea of a good time, but if you want to save money without feeling deprived, the first thing to do is to figure out where your money is going right now, and then make the cuts that will sting the least.

For example, when I went freelance, my husband and I went over our expenses and realized that we could save over $100 a month by cutting cable and going with streaming services. Although I went into the switch feeling a bit nervous about how I'd keep up with my stories (I know, I know), the end result was that we continued watching the same shows as always, with relative ease -- and the cost savings we achieved with that a few other fairly easy choices meant that I could buy myself a bit more time to see if freelancing was the right decision for me.

Bottom line: don't assume that being frugal has to hurt. If you look honestly at your expenditures, you'll probably see a few places where you can make some fairly painless cuts.

2. Make more money.

You could look for an extra part-time job, but if your day job is like most, you won't have time to juggle both and be effective in either.

My best advice for someone who's looking for extra money to fund a transition to freelance is to start that switch right now, and make a gradual move to full-time, freelance work.

By picking up a few gigs here and there, you can determine whether the freelance lifestyle is right for you, as well as figuring out which types of clients and jobs suit you best. And because you won't be committing to another regular job, there's less chance that you'll get in trouble with your full-time employer while you bank money.

3. Use a windfall.

Did you get a tax refund, or a settlement, or money for an event or milestone? Consider using it as a nest egg to finance your new venture. You can always make a plan to pay yourself back over time, if it feels wrong to burn through an unusual influx of cash by switching to freelance.

4. Get a loan.

There's a reason this one appears far down on the list: if you're going freelance, and not starting a business with demonstrable cash flow and the potential for a market analysis, you're probably not going to convince a bank to give you a small business loan.

Nor would I necessarily recommend that you hit up friends and family for money, especially before you're sure you'll make enough to pay them back in a timely fashion. But if you have other sources of financing, and a growing client base, and need a little extra to make the leap, a small personal loan can get you there that much faster.

Just be sure to spell out terms in writing and to fulfill your promises to your benefactor. You don't want there to be any confusion about who's paying whom, and how much, and when.

5. Severance.

If you're considering freelance in part because you've been laid off or otherwise lost your job, severance can be a great way to finance the next phase in your career. Just be sure that you read the fine print in your severance policy so that you'll understand exactly how much money you can expect to receive, after taxes, and for how long, and whether healthcare benefits and other perks will be included in your package.

If you're receiving or expect to receive unemployment, you'll also want to read up on how working for yourself affects your eligibility. While it is often possible to start freelancing part-time while receiving unemployment, you'll need to understand the rules in your state to make sure you're adhering to the law when you file. For example, in some states, working a few days a week will reduce, but not suspend, your unemployment check. Check with your state unemployment office for specifics.

Read More: 9 Types of Freelance Jobs | 6 Places to Find Freelance Listings Online | What You Need to Start Freelancing

Related: Top 10 Jobs to Work Remotely | Top 10 Job Search Tips | How to Find Freelance Jobs

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