I Went Against Conventional Money Advice. Here's What I Learned.

By Literally Broke

Photo by Toa Heftiba on Unsplash

---

Freelance taxes are the downside of side hustling (yes, I too hate myself) that no one warns you about. 

So why do freelance taxes suck more than I did at my cousin’s Bar Mitzvah? Because thirty percent out of your freelance income is paid quarterly to the United States government. 

It’s a confusing, frustrating process that personal finance experts never seem to warn you about. Instead, they treat side hustling like it’s the secret sauce to getting out of debt and not another name for a venereal disease (just kidding).  

Over the past year I’ve made 5k freelancing. This money has helped me build up my emergency fund and pay off my credit cards. 

But since I’m trying to get my financial act together, I finally set up a specific savings account just for that 30%. But in May I realized something: the $450 in my Qapital account that was set aside for said freelance taxes really wasn’t working for me or for my goals. 

My one remaining credit card balance at this time has an APY of 18.24%. This high interest rate means I was spending at least $45 a month on interest for two years. That’s thousands of dollars in interest, FYI. OBSCENE. I’m hesitant to even calculate how much I’ve paid in interest because it will make me want to hide under my covers and never come out (not in the fun way). 

So, after a great deal of deliberation, I worked up the courage to pay off a credit card with this aforementioned tax savings. Did it make all the difference and wipe my debt clean? No. But it did get me out of debt faster and saved me hundreds of dollars in the process. 

And as for my freelance tax savings, I quickly built it back up! As of today it’s fully funded and good to go. Remember: sometimes when it comes to figuring out what works best for you, you have to say:

FUCK

THE 

EXPERTS

**mic drop**

---

Follow my blog with Bloglovin

Blog RSS