I Don't Get Vacation Time as a Freelancer. Here's How I'm Coping in 2024

As of last month, I've officially been a full-time freelance worker for a full year. I started freelancing alongside a more traditional W-2 job that offered the kinds of benefits we've all come to expect from full-time white-collar jobs.

For example, I had employer-subsidized health insurance coverage, and when I quit that job, I encountered sticker shock when I hopped onto HealthCare.gov to see how much a self-funded marketplace plan would cost me. Ditto for how complicated my tax situation has become -- I've opted to hire a tax professional rather than attempt to file my returns myself via tax software, but it's still a new extra expense.

But perhaps the biggest hurdle for me as a freelancer (and indeed, a small business owner) has been accepting that I need to take time off occasionally -- and I would no longer have employer-provided paid vacation time. Luckily, I came up with a solution.

Saving money here and there

I'm writing this after returning home from a much-needed vacation (and I was even recovering from surgery at the beginning of the trip). I can no longer pretend that I'm some kind of superwoman who doesn't need to unplug from work and recharge occasionally -- the proof was in the pudding (I got better sleep on my vacation than I've had in years).

I'll admit that the prospect of having a few smaller paychecks as a result of working fewer hours makes me nervous, however (and given how long I spent in a low-paying career and living paycheck to paycheck, this isn't so surprising). So near the end of 2023, I hatched a plan.

I did some math and arrived at a dollar figure that represented a few full days' worth of work at my usual hourly rate, and I spent the last two months of 2023 building up that amount in my savings account. I knew this was just a starting point, and since achieving that initial savings goal before 2024 officially began, I've been able to stick several hundred dollars more into my "PTO Fund." I hope to add more, maybe $50 here, $100 there, until I can cover at least a full week's pay from the fund. And best of all, I'm saving money that I've already taken taxes out of, so I'll be able to pay myself back for time off without sweating about owing Uncle Sam.

My high-yield savings account makes it easier

My vacation fund is an example of how leaning on the right bank account can make your life easier. I opened a high-yield savings account with an online-only bank almost two years ago, and I have come to love that account so much. I can create up to 30 sub-accounts within my main one, which has let me save for quarterly tax payments (freelance life!), buying a home in 2024, and vacations like the one I just returned from.

When I decided to save this money, I created a new sub-account, set an initial goal, and got to saving. My bank sends me emails updating my progress, and I even get a "congratulations" email when I meet a saving goal. It's all very encouraging, and if you struggle to save money, having this kind of extra motivation might help you, too. Plus, my bank has a great mobile app, so I can check in on my PTO fund anytime I want, from anywhere.

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All things considered, I love being a freelancer -- I make my own schedule, I choose my own work, and leaning into this work style has brought me the kind of financial success I have never had before. A lack of paid vacation time is definitely a drawback, however, so I'm really pleased I was able to do this for myself. If you have a similar employment situation, I recommend making it a priority -- your future self will thank you.