My family usually takes two “bigs” trips each year: one spent visiting family across the country and another to explore places that are new to us. This is no problem for my wife. Her employer gives her four weeks of paid vacation every year and she can bank on that when we’re planning where we want to travel and how long we want to spend there.
The problem for me, however, is that no one is paying me to take time off. It’s kind of ironic in a way because my wife has one employer who pays her to not work for a limited amount of time, but I have many employers who do not do the same for me. That’s one of the many benefits that often comes with full-time employment and something we may even expect an employer to provide. For me and others who call themselves freelancers, that is a benefit we either have to forgo or intentionally manage ourselves.
The way my family has dealt with this in the past has to call these “working” vacations where we make billable, working hours part of our vacation agenda. If you’re thinking this sounds awful, it kind of is, and that’s because it makes no one happy. My kids are not happy that I’m not spending time with them. My wife is not happy to be solo-parenting during vacation. I’m certainly not happy knowing there is a lot of fun to be had just outside my makeshift office. It’s a no-win situation.
We’re not going to be looking at CSS in this post but we are going to talk about tricks for taking paid vacations when no one is paying you to take time off. I suspect that there are a number of us in the front-end development community who face similar situations and addressing is one way we can figure it out together and hopefully glean ideas that make our work-life balance much healthier.
Why paid vacations are a big deal
I realize this might go without saying, but let’s get it out of the way: taking time off is important to our overall well-being. No one wants to be Richard Hendricks in Silicon Valley after pulling an endless string of all-nighters.
Seriously, though, taking time-off allows us to recharge and decompress from the stresses of our normal working lives, enjoy things that are not directly tied to work, and even return to our desks much happier and more productive than we were when we left. For me personally, I tend to resent my work the longer I go between vacations and that resentment most definitely carries into my personal life which is unfair to me and my family alike.
Forming a mindset for taking time off
Let’s be real about this: there is no trick for getting other to pay the tab for your vacation when you run a freelance business. What we’re talking about instead is changing our way of thinking and forming habits that provide us with indicators for when we can afford to take a vacation. This requires a little bit of planning, a smidge of budgeting acumen and a lot of self management.
More specifically, let’s go over three actionable things we can do to form good habits for knowing how much we work, how much we earn, and how we can set funds aside that allow us to take time off when we’ve earned it.
Start by tracking your time
I cannot advocate enough for tracking the time you work. By this, I mean creating a record of the amount of time you spend working each day and noting what that time was spent doing. If your freelance work is billed on an hourly basis, you probably already do this to some extent, but I would even recommend it for those who work on retainer, contract or flat-rate projects. The benefit is you know how many hours you typically work in a day, how much of it was billable, and where you are spending most of your time.
There are other hidden benefits to time-tracking and those may even make for a fun follow-up post. Suffice to say, tracking time is the foundation for knowing whether or not you are even eligible to take a vacation in the first place. It’s your gauge for knowing how much time you have put into work and when you should consider taking time off.
I use Harvest for time tracking (you can use my referral link for a trial and discount) but I have heard great things about Toggl, Timely and FreshBooks. If you have one you’re particularly in love with, then please share it below and I’d be happy to consider adding it to the list.
Pay yourself a salary
Freelancers do not always have the luxury of being paid regularly or even on time, but we can pretend like we do. If you’ve been in business for yourself for any amount of time, then you likely have a feel for what you bill clients on an average month and that’s a decent place to start for giving yourself a paycheck.
I know it can be different for everyone and not all freelancers can bet on having a regular stream of income. In those cases, I would likely start by adding up your monthly living expenses and using that as your monthly payments to yourself.
I’m far from being a financial advisor or anyone to instruct others on how to manage their money, but one trick I’ve learned for myself is to keep all my client payments in their own separate bank account and set up a recurring transfer from it to my personal account on the first of every month. That ensures I am paying myself, that I have my living expenses covered, and that I am not immediately blowing any extra money I might be fortunate enough to made above my expectations.
Regardless of what trick works best for you, the important thing is having an idea of what a “normal” month looks like for you and allowing yourself to stash some cash away to use to pay yourself when you are not technically working.
Establish a vacation fund
My wife’s employer gives her a specific number of days off each year, but she has to earn them. In other words, she gets a credit towards paid time off for every day she works up to four weeks in a given year. It’s sort of like they’ve set up a fund for her that rewards her for showing up to work and they draw from it whenever she chooses to use the credits for vacation.
I think freelancers can do a similar thing as long as we are taking the steps we mentioned above of tracking our time and paying ourselves. If we know how much time we need to work to earn a baseline amount of money to cover our expenses, then we skim the top off what we earn in excess of that to pay for time we decide to take off of work. In a way, it’s like we are putting in extra work and using the credits from that work for well-deserved time off. It’s not a perfect analogy, but allows us to mimic the same sort of benefit my wife gets.
The same goes for the other way around: if we earn less than we expect then the chances are (and, yes, this is a big assumption) that we worked less than we expected and that counts against our paid time off. That’s not a fun thing to talk about but certainly is one of the risks that comes with self-employment. Where my wife cannot lose her paid time off if her employer has a bad month, that is a distinct possibility with freelancing.
Calculating and tracking vacation
I put a spreadsheet together to help put the concepts we’ve covered in this post together for the sake of tallying up vacation hours.
All cells highlighted in yellow mean you can edit the values. The others calculate on their own.
Spoiler Alert: It’s not a silver bullet that is going to work for everyone and your mileage may vary. That said, it might be a decent starting point for you to plug in a few numbers, track your client payments, and spit out a result that gives you affirmation for deciding when to take time off. You’ve put the hours in and deserve to at least treat yourself every now and then.
Aren’t there other ways to calculate this?
You bet. As mentioned, the spreadsheet above is not going to be perfect for every need or situation. For example, if you absolutely have no way of defining a salary for yourself, then the spreadsheet is going to fall apart right away.
Another idea might be to use your hourly rate, calculating your revenue based on the number of hours you work in a month, then taking a percentage of that to fund your paid time off. I made another spreadsheet of how that might work. Again, all cells in yellow are ones you can change to suit your needs.
We all know the saying “with great power comes great responsibility” and the same can be said of freelancing. We have a lot of say in how we defining what we work on, who we work for, and when we work, but there’s a lot of self-management, overhead and responsibility that comes with the territory.
Taking time off is one of those responsibilities. No one is going to tell you to take time off as a freelancer and none of your clients are obligated to continue paying you when you do. Hopefully the ideas we covered together in this post help encourage you to take well-deserved time-off, or at least fuel some ideas for how to do it.
And, of course, if you have different ways of dealing with this that work well for you then please do fill out the form below and we’d be happy to share them.
I couldn’t agree with this article enough as I too have been on both sides of the “paid” vacation time boat … pun intended! ;-)
Good points all around, will certainly take a look at those spreadsheets next but wanted to say thank you!
Thanks for this great post…
Brilliant article! Thank you thank you. The article addresses an important point.
On the other hand though, I feel something important is missing. You talked about time and money but only in the context of having enough money for a holiday.
My recurring problem is: how do I arrange the time to have a holiday? Scenario: I decide to go on holiday. I tell clients I will be unavailable. I leave. Two days in to my trip a client contacts me; it’s urgent, the website has a problem and payments are not being collected. They’re losing money every hour that it’s broken. I’m the expert and they have no one else to call.
Couple days later, a potential new client is asking for a quote. It could be a great project, it makes sense to put a proposal together and give them a quote. You want to get back to them within a few days; telling them you’re away for 3 weeks would mean they’ll get quotes from others and you’ll miss out on the project. Not replying to their email for three weeks because you’re away, switched off your phone and didn’t see their email, doesn’t make much business sense.
The next day, another client is having trouble accessing their email. You figure it will only take 10 minutes to help them resolve it, but you’re on a bus on the side of a huge mountain, three hours away from civilisation, without any decent internet connection. They’re just going to have to wait until 10pm when you’re back at the hotel and really want to avoid thinking about work.
In the web world, things can and do go wrong all the time. You’re the expert freelancer. If you have a lot of clients, some of them always require some of your attention.
How do you deal with this? How do you plan ahead such that taking time off is not a problem?
That’s a legit concern, Gavin. At the same time, that sounds more like a planning issue and the answer (or answers) might make for a good post on its own.
The bottom line is that I do not see any of the scenarios you nicely outlined as any different from someone who is a full-time employee: that person still needs to decide to take time off, request it from their boss, and leave a good contingency plan in place should something come up while they are out. The same is true of freelancing: decide to take time off, provide clients with a heads up, and provide contingency plans if clients have an emergency, and provide some sort of out-of-office reply for new client work.
Taking time off as a freelancer is always an opportunity cost: you either work and get paid or you don’t work and give up the billable hours. It’s one of the reasons freelance is so difficult and why it may not be for everyone.
Great article. Here is something that’s worked well for me:
Establish a side income, could be a product or service which you dont have to do much work for, I sell hosting / domains for all of my clients. I dont make huge money out of it but it pays my sick days, holiday pay etc.
Heck yeah, that’s a solid approach. It’s still the concept of working a little harder up front to reap the benefits of accruing time off but nice that there’s a possibility for long-term passive income to boot.
Great read as always Geoff!
Very nice article and good points, from the writer as also from people commenting this.
I will disagree though on one very important point. You answered to Gavin that a good plan/announcment to clients , and an out of office reply will do the job. That’s a job killer for a freelancer. Clients don;t care about you going on vacation when they have issues. They will try to find solutions, and when the next guy will take over your client , you will have a bad first day at the office finding out that you no more work with one of your clients (or more!).
You said it: Freelance is not for everyone. After all you cannot compare freelancer to an emploey. Freelancer can plan his vacation anytime. Thats not the case with an emploey especially when he has to coorfdinate with other colleges wanting to go on Vacation on the same time.
So as a freelancer you always plan to have a few minutes during the day, that you will check your email for issues or new quotes. This can be in the morning (maybe getting up 15 minutes before the others), during the day in a break (15 minutes is not big deal, a toilet visit can last more some times….) or in the afternoon when everybody is chilling out. A good plan would be to have a college or friend to cover for you on a difficult situtation, where you can forward him the problem and the client having the issue. This would be ok for your client and he wont think other solutions, as you beeing on the road its plausible and you need more time as ususall to answer. The thing is that you give an answer and a solution. Same thing for new quotes. Its much better to answer in the same day with a personal (not automatic) reply, like you will examin this right after you are back in the office. Future client will concider this as a plus. Offcourse you need to not get in the trap of solving the issue or proccessing a quote. That needs selfcontrol.
Yes Freelance is not for everyone and you need to adjust your whole life to it. Even vacation, in a way that it won’t harm your business, in order to have a business after vacation. And this can be a good thing. Its all a matter of prespective and goodwill.
Just my personal opinion after many years of hardworking freelancing in a very difficult economy as the one in Greece.
Excellent points, Fotis!
I still tend to believe this boils down to a planning issue to a large degree. I don’t disagree at all that vacations are a job killer; in fact, that’s the opportunity cost I mentioned in my reply to Gavin.
A vacation fund is one that builds up over time and needs to be able to cover the lost opportunity costs of a project that never materialized because of the vacation.
Heck yeah, that’s a great idea and exactly the sort of thing I had in mind when it comes to having a contingency plan for the business while you’re away.
It’s so true and you are spot on that freelancing is something you adjust your life to. I hesitate to think there is a silver bullet for taking time off that works for every single person or situation but, through conversations like this and shared experiences, hopefully it sparks us and others to figure out what works best for us individually.
Another approach–to the financial side, not the how-to-take-the-time side–is to skim a percentage off the top of every (net, post-tax) receivable. If you want to pay yourself for two weeks’ vacation a year, it means you need to fund two weeks off from the fifty weeks you’re working, so you take (2/50=) 4% and tuck it away. Three weeks? (3/49=) 6.1%. Four weeks? (4/48=) 8.3%. Five? (5/47=) 10.6%.
This system doesn’t require regular income. Percentages are percentages.
Keep that money safe and draw from it when you take time off. When it runs out, then as Geoff puts it, “Back to work!”
Absolutely! I tend to think the same is true for building other “benefits” into freelancing income, like retirement and short-term disability.
There is so often a race to the bottom for charging less for hourly work, but having a more complete picture of what it costs to do business (vacations, sick time, insurance, disability, etc.) and using that to calculate an hourly rate might be a much better place to start.
Back to work! :)