Picture this: as a hardworking freelance who spends most of her time writing at her desk or standing in rooms delivering workshops or classes, I try to keep fit. Cycling is a passion of mine. It also helps me think clearly, often about work, as I coast along through beautiful countryside. Most pleasing.
Now picture this: a tricky bit of off-road. I falter. Bang! I have broken my wrist, which means a plaster cast for six weeks. My first thought within seconds of falling and knowing I had done some real damage? Will I be able to type? If I can’t, I can’t work, Disaster.
As it happened, luck had not completely abandoned me. I broke my left wrist and I am right-handed. And after an initial short period, I was able to type with both hands even though wearing a plaster cast. Basically, it could have been much worse!
However, the whole episode has got me thinking about the importance of contingency planning. Given the law of averages, at some point in our freelance careers, many of us will have a mishap – accident or illness – which could keep us out of the working loop for a considerable amount of time. What would you do? What can you do? We can’t see into the future but we can plan for such things happening.
From analysing my recent experience, talking to fellow freelances and looking at some of the advice and experiences I’ve read online, there are a few important elements to consider when putting together a contingency plan:
- Finances/cash flow
- Insurance cover
- Support from colleagues
- Client relationships
Finances – keeping afloat
Cash flow, chasing invoices, getting paid and then paying our own bills can be challenging at the best of times! But effective contingency planning is a lot about money. Will I have enough money to survive if something goes wrong and I can’t work for a while?
In an ideal world, the rule of thumb is to have at least three months’ money set aside to tide you over if you have to take a break from work. So, do a thorough and honest budget about what you spend on a monthly basis, bearing in mind that this needs to be kept under review as costs e.g., of food/groceries keep changing.
Three months sounds a lot but think about it. One month is very risky – even a relatively straightforward broken bone like mine could have put me out of work for six weeks; two months does not give that practical and psychological comfort zone while three is a decent enough time for getting better and finding or re-establishing work.
It can be hard to make ends meet let alone save but it is sensible to plan for the unexpected (it doesn’t have to be an injury, it could be that one of your major clients goes out of business so you lose a large chunk of work and need time to find more). So try to start building up a 'just in case' fund now. Even if it’s just a few quid a week siphoned off into a dedicated account - one less packet of fags, one less bottle of wine, one less takeaway, one less cinema trip a week will soon add up. In no time, you will feel very satisfied as you see your financial lifeboat increase in size and grow ever more buoyant.
It’s not a saver’s market out there but try to find the best interest return for your money without locking it away. And remember, if you save your tax money in a savings account, you can always transfer the interest to your ‘lifeboat’ account.
(Also, ask your union if they have any benevolent/hardship funds you could apply to in the event of being unable to work through accident or illness. It’s worth knowing what might be available as if you were to have a mishap, it’s unlikely that you’d feel like looking around then.
Insurance – is it worth it?
Many of us will have taken out some professional insurance: to cover equipment, public liability, professional indemnity and suchlike. Some cover can be secured through our unions and it is always useful to know what you can get through your membership. Equity, for example, offer accident and backstage accident cover as part of membership benefits.
However, in the case of accidents away from work like mine, you need to consider what cover, if any, you might want. But before any further consideration of insurance cover, comes the question: Will I be able to get insurance? The truth is (speaking as the daughter of a former insurance underwriter, so the subject is in my blood!) you can always get cover from someone. But it may not be straightforward and the cost may be exorbitant.
Let’s look at the likely cover that you might be looking for. The main policies are: personal accident/injury cover; critical illness cover and income protection cover. The latter, in particular, can be very challenging to find for the self-employed but it is worth seeing what may be available.
There are a handful of insurers who handle schemes for creative professionals and they tend to already work with some of our trades unions. So, I would always recommend talking to the person at your union who deals with insurances and ask if they know of anyone covering the three areas mentioned above. The advice from your union is free and objective.
If you don’t find what you need through this route, don’t worry. From my own and other freelances’ experience, using a recommended insurance broker could be the answer. The ‘recommended’ part is key. Start asking colleagues if they know of anyone. The right broker will be able to get you a bespoke insurance package and answer questions about eligibility, etc.
Final warning
If you do find affordable insurance, be extra vigilant that it will do what it says. Think worst-case scenarios and check that the cover will protect you in the way that you will need and expect.
In the next blog, I’ll look at other areas of contingency planning apart from finance.
Want to learn more?
FEU Training is running a number of free workshops around the country this autumn. If you would like to attend, look out for updates for workshops coming to your region or register your interest at info@feutraining.org (if we have sufficient demand, we’ll come to you).