I started freelance writing about two and a half years ago. I was doing it on the side, and eventually, I realized that with the referrals I was getting, it was feasible to make it my full-time gig.

(This story is longer, and I shared it last week on Being Freelance if you’re interesting in hearing the whole thing.)

But when I finally made the switch, I quickly learned a few key lessons that only experience can teach.

I want to save you from those experiences. Learn from me, won’t you?

Save for Tax Season

I work with an accountant for the bookkeeping and taxes of my business, because I abhor it. I’m completely intimidated by that side of things, so I defer to an expert. But even though I faithfully pay my estimated quarterly taxes (both federal and state, mind you) I have owed at tax time every year on April 15. Not a ton, but I owed. No tax return for me.

The lesson here is that even though you’re getting as close to your projected income as you can with those estimated payments, there’s a chance you’ll still end up owing at the end of the year. This is an issue for freelance writers because our overhead is so low that deductions are limited. You’ve got a computer, a desk chair, and desk…and not a lot else.

Keep a reserve of at least $2,000-$5,000 in the account you pay your taxes from in April, ‘cause there’s a good chance Uncle Sam is gunna claim it.

Make Retirement a Priority

I had a nice retirement match at my first job out of college, and setting that whole situation up was a breeze because the employer helped me through the process. Once I left that job, I quickly realized that to keep on pace with my retirement planning, I needed to make it a priority and set up some accounts of my own.

I worked with a local broker to establish a Roth IRA and a SEP IRA that I could contribute to on my own, and make regular, monthly contributions to these investments.

It’s really easy to let this slip down the priority list when you’re doing a million other things, but be sure to do this early on when you start as a freelance writer. Time is money when it comes to compound interest, so don’t put it off. It’ll cost ya.

Find a Niche

Hungry, new freelance writers often take any job because, MONEY. I get it. I did it, too. But as soon as I defined my niche as a writer (for me, it was with SaaS companies) I started getting more consistent work and better, more relevant referrals. I came to know a lot about the subject matter they were interested in. I could showcase testimonials that were impressive for new, like-minded clients.

Once your workload picks up and you’re no longer sweating the need for more freelance writing gigs to pay your bills, transition your way into a niche. The sooner the better.

There is so much more I could talk about on this subject, but these three topics are a good start.

Have more questions for me? Just tweet me.

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