A career as a freelancer promises better income, among other things.

Upwork’s article “How Much Can Freelancers Make in 2024” claims that freelancers in the U.S. earn an average of over $90,000 and up to $275,000 annually. ZipRecruiter says U.S. freelancers earn an average of $99,230 annually, with 10% of freelancers earning at least $200,000.

That’s serious freelancing career income.

Freelancing careers evolve, as the income ranges above suggest, and we think it’s a five-stage journey. To simplify things, we use star-based ratings focused on earnings, which seems to be the top concern among freelancers. And yes, one star is the worst, and five stars is the best.

1-Star Career: Increasing Debt

A freelancer whose total income is frequently lower than their combined business and personal expenses is experiencing a 1-star career.

Savings can help smooth the side effects of surprise expenses and earnings dips until bank balances get too low. When this happens, freelancers may be forced to rely on loans and credit cards to cover expenses, and this steadily increases their debt to unsustainable levels.

Lowering expenses further can be challenging, so focus on increasing earnings enough to reach the next career stage.

2-Star Career: Managing Debt

Freelancers experiencing a 2-star career have a small or large amount of total debt, especially loan and credit card balances, but it’s not increasing.

When debt temporarily grows, perhaps due to a one-time or larger-than-expected expense, it is soon reduced to previous levels. Losing a client and gaps between projects can also temporarily grow debt. Generally, a freelancer’s average income balances with all expenses over a period of months or a year.

Getting to a 3-star career usually involves increasing earnings enough to pay off loans and credit cards while continuing to cover expenses.

3-Star Career: Financial Balance

Freelancers with low debt and a meaningful amount of money saved to cover emergencies and vacations are experiencing a 3-star career.

This is the first of the five stages that feels comfortable to freelancers because their income is higher than their expenses. Some of that extra income can be used to lower steadily loan and credit card balances, and the rest can be saved for the future.

Still, freelancers shouldn’t settle for a 3-star career when they are so close to a 4-star one.

4-Star Career: Managing Wealth

The main difference between a 3-star and a 4-star career is the amount of extra income available after a freelancer pays their bills each month.

Freelancers with a stage-4 career have previously paid off their loan and credit card balances. More importantly, their income is consistently high enough to keep those balances at zero while paying off a car loan and saving for a down payment on a future home.

These freelancers are comfortable but not completely debt-free. That happens during a 5-star career.

5-Star Career: Increasing Wealth

People get to experience the full promise of a freelancing career at the 5-star stage.

Freelancers with a 5-star career experience enough income to cover their present wants like luxuries and future needs like retirement as they continue growing their wealth through savings and investments. This allows them to purchase expensive items with cash and own homes without mortgages.

Set a 5-star freelancing career as your goal unless you never want to live debt-free or eventually retire.

Moving Towards a 5-Star Career

Freelancing promises a career earning as much as you need, what we call a 5-star career.

Many freelancers strive for years without getting close. Others spend a lot of money and waste a lot of time on their freelancing journey with mixed results. Our team created the Earn More & Work Less™ strategy to help.

Get started with a free online course at www.freelancingstrategy.com.