The Not-So-Obvious Costs of Being Your Own Boss

You have decided to be your own boss and earn a living as a blogger. Welcome to the tribe of people who have chosen to lead a life outside the cube.

As you start earning from your own venture, you will be tempted to see how you are doing viz an employee earning a monthly salary. If you worked as an employee, you will certainly do so. You will want to compare your earnings as a blogger or a freelancer to your old salary.

However, the two are not strictly comparable. There are many additional costs of being your own boss, stuff you did not have to provide for when you worked as an employee.

When you work for a large company, not only do you get a monthly income, you get lots of other perks and benefits too. As your own boss, you are the one who has got to pay for these.

These are the hidden and kinda unexpected costs of running your own gig, or of being a freelancer, or an entrepreneur.

These are the extra costs of being your own boss.

Let us take a look at some of them.

Medical and Health Insurance

You are going to be entirely responsible for your insurance. That means, you have to find the right insurer that gives you the best coverage at a reasonable price. Then, you have to make sure there are no terms that could deny you coverage when you actually need it. Finally, you have to pay for it.

Health insurance can cost a lot. But not having health insurance is not an option really. So be prepared to do the hard work and to cough up the amount.

Some companies also provide life insurance benefits for their employees. If this was the case with you then you will now need to earn enough to cover for that as well.

Funding Your Future

When it comes to saving for your future or funding your retirement, the typical advice is, “Save in your 401(k).”

Being self-employed you no longer have access to a 401(k) plan where contributions were made automatically from your salary. When you are working for yourself, you have a make a conscious effort to start setting money aside for your future.

You also do not get the matching contributions from your company. This one can be a lot of money that you have to work for yourself.

While you no longer have access to a 401 (K) plan, there are plenty of other options that exist for saving for your retirement. This article by Fidelity details out some of these plans when you no longer have your trusted 401(k).

So go ahead, find a plan but remember to start investing. The earlier the better.

Paid for continued education, training, and conferences

You have a special skill, or a hobby, that you want to write about. Maybe you can write well, too. That isn’t enough to become successful as a freelancer.

As a blogger, you will need to know much more. You will invest in courses about SEO, about how to make money from blogging or about Pinterest. You will be paying for these yourself.

Being self-employed you will be responsible for the accounting, taxation and legal stuff of your business. You will either have to take courses to figure out these for yourself, which will cost you time and money. Otherwise, you will have to pay a professional to do this for you.


Holidays and Time-off

As a freelancer, you have lots more flexibility in deciding your work hours. You get to choose your vacations and day-off according to your needs. Don’t get me wrong, you will work a lot harder. But you are in charge.

Just remember, the time you take off is no longer paid for. A standard leave policy permits two weeks off, five sick days and ten paid holidays. This works out to five weeks of paid leave or roughly ten percent of a year.

As a freelancer, when you stop working you stop earning too.

Access to free/cheap products

I worked for a bank. As an employee, I got loans at a discounted rate, waiver on credit card fees. We even got a small amount as a personal loan (read little documentation, free to use as we want) at a super attractive rate.

Other companies give their products at attractive rates to their employees – stuff like soaps, shampoos, cereals.

Many companies offer complimentary meals, snacks, and coffee. Travel is paid for. All these add-up. Now you have to foot the bill yourself.

Expenses of Working From Home

nice home office

One of the many perks of being a blogger or a freelancer is getting to work from home. You can manage your house, be with your children and yet, earn a living.

This isn’t for free though. You pay for your laptop and equipment ( a new camera, anyone?). You need to set-up a proper home office. Your utility bills will inch up. There are costs involved.

It is exhilarating and rewarding to be your own boss. However, let us not forget the additional costs of blogging or of simply being your own boss. In order to keep up your lifestyle, you must be conscious of these and earn enough to compensate for them too.

What are some of things you discovered you had to pay for as a self-employed person? Did these surprise you? Let me know in the comments below.


Photo by from Pexels
Photo by from Pexels


  1. Menesa

    October 15, 2018 at 5:19 pm

    Excellent, eye opening advice. Thanks for sharing and making me more conscious of what expenses are incurred as your own boss.

  2. amira

    October 15, 2018 at 10:13 pm

    I always enjoy reading your posts, Bhavna! These are some great realities of being self-employed and yes, you are absolutely correct about all these expenses too! In my opinion, the perks do outweigh the costs but that’s just me 🙂

    Amira at ASelfGuru

    1. pennies4cents

      October 16, 2018 at 6:46 am

      Thanks for your support and kind words, Amira.
      And I agree with you that the perks do outweigh the costs. This article was just highlighting that there are a few things we may not always consider.

  3. Quijuana

    October 16, 2018 at 3:40 am

    Great post. I’m not ready to be my own boss for many of the reasons you named. The costs are so great. I just love my blog. But definitely makes me ?

    1. pennies4cents

      October 16, 2018 at 6:53 am

      So glad you enjoyed the post.

      There are costs. Then there are benefits. Each one of us decides what is best given our unique situation after weighing in all the factors, just like you have.

      Wish you the very best with your blog.

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