Why You Should Raise Your Freelance Rates Even Higher

For the past few weeks, in the Careful Cents Freelancers Club, the subject of “what to charge” has been a hot topic. I’ve been dealing with this dilemma myself and got some really great advice from everyone’s input.

You might think that raising your rates is a bad thing, that it might scare off your current or potential clients. But in many cases it’s the opposite.

And you’re actually doing yourself a disservice if you don’t charge the proper price. Why? Well the main reason is because if you don’t charge enough, you don’t give yourself enough freedom to fund your creativity.

Especially if you’re an artist, a creator, a painter, a web designer or even a freelance writer like I am – you’re crippling your business (and your creativity) if you don’t charge enough so you can afford to create.

Why now is the perfect time to raise your rates

According to Carol Tice, the resident expert at Make a Living Writing, the best time to ask for a raise from clients is in mid-November, which makes NOW the perfect time to inform and negotiate for a higher price.

She also suggests that freelancers always be looking for opportunities to raise their rates, even if it’s by 10% or 15%. Why? Because you need to keep up with the higher costs of living and rate of inflation.

Being your own boss is a lot more expensive than working as an employee – since you’ll be paying twice as much for your half of the social security and medicare taxes, for instance.

I also believe that as a freelancer sometimes you just plain old deserve a raise. With that, here are 5 reasons why you should raise your rates right now!

1. You can say good-bye to high maintenance clients

We all have that one client who’s demanding, picky and underpays us. But if you significantly raise your rates they will likely find someone else to underpay and overwork.

If you work for cheap or high maintenance clients, and significantly raise your rates, they tend to move on. Of course, you have to be willing to part with the income, but you could probably find two higher quality (and better paying) clients to replace them in no time.

2. You’ll be working smarter and not harder

When you increase your prices, it gives you the chance to work smarter instead of working harder. The longer you work with a client, the greater trust factor you’ve built up and the better your skills have become.

This gives you the opportunity to work with companies, causes, or individuals you believe in. And if you do it right, like Amanda, you could earn an extra $1,000 a month from freelance writing gigs.

3. Your value as a freelancer has increased

Another smart time to raise your rates is on the anniversary of your partnership with that client. Since you’ve worked for them for over a year or more, your worth in their eyes has increased.

You’ve learned more about them, their mission, what they’re looking for, what their needs are and for these reasons you need to increase your prices to reflect this (which also makes this a key negotiating point).

You’re also much more experienced than you were a year ago; you’ve honed your skills, learned new techniques and now deserve to be compensated for this.

It’s hard for freelancers to adjust the lens through which they see themselves, but you’ve grown as a solopreneur and now it’s time to adjust your vision to get paid what you’re worth. This is something I’m still working on myself!

4. People will respect you and your time

If people are paying you more for your time, they will pay a lot more attention to the tasks they give you. They will be hesitant to tack on extra work or ask for additional changes if you charge a higher price.

They will also be more upfront with each project and the work it entails. In short, people will respect you and your time more if you charge a competitive (or slightly higher) price for your work.

While a higher price doesn’t always mean higher quality, in many cases it does and that’s what people associate with versus a cheaper price. You need to sell people on value instead of just price.

5. You can do more great work

If you decide to increase your rates and charge what you’re worth, you’ll open the door for the opportunity to do more great work.

The kind of work that feeds your creative spirit as well as puts food on the table and helps you sleep at night (as opposed to the scummy or unfulfilling work you had to do to pay the bills).

You won’t be as stressed about your finances, wondering if you can pay your bills and you’ll have time for more important things like your family, or sleeping.

Another benefit to raising your prices is that you will unconsciously put a higher value on your own work. This will increase your self-confidence and help you start believing you’re worth what you say you’re worth.

It’s true, people are willing to pay more for a product or service, if they think it gives them something truly special or significant – and if you present it in the right way.

How much is too much to charge?

After you finally kick yourself in the butt (like I did) for not charging enough for your products, services and skills – it’s time to figure out how much is too much. What’s the right price and when is it too high?

To keep it simple, you can only charge what people are willing to pay. There are clients that will recognize skilled and quality writing, but it will take extra effort on your part to seek them out – although in the end it will be a worthwhile investment.

As a rule of thumb, keep steadily raising your prices (like Carol suggests) until the majority of your clients start complaining.

In my experience, even when you throw out an outlandishly high price and the client gladly accepts, you’re still not charging enough. So keep upping your rates until you hit a wall.

Is it time you raised your rates and started earning more? What’s your motivation for getting paid what you’re worth?

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About the author: Carrie Smith is the financial artist and editor behind Careful Cents. She helps creative entrepreneurs make a living with their creations, and reach financial freedom through systems and financial organization. She’s been featured in The Huffington Post, Glamour Magazine, Kiplinger Finance and several other business websites. In May 2013 she quit her full-time accounting job to pursue entrepreneurship and blogging. You can find her on Twitter or Instagram @carefulcents.

Comments on this entry are closed.

  • Jordann November 8, 2012, 7:17 am

    I’m just starting out freelancing, so I’m still in the “I’m just happy to be here” phase. This post gives good advice for when I eventually start raising rates though!

    • Carrie Smith November 8, 2012, 8:55 am

      Don’t sell yourself and your services short though. Even when you’re just starting out. You need to charge enough money so you can still afford to create great work!

  • Budget & the Beach November 8, 2012, 8:58 am

    I still struggle with this for reasons that are more complicated than I could explain in a comment. Basically, it would be hard to raise my rate with the client I work with 99% of the time, but not too bad for new clients, so maybe there is a compromise. I really need to go to freelancing school. I’m really struggling with it. :( sorry, bad day. :(

    • Carrie Smith November 8, 2012, 12:55 pm

      I’m sorry to hear you’re struggling and having a bad day :( Feel free to email/contact me anytime if you have questions or just want to vent. I’ve been there too!

  • Carol Tice - Writer November 8, 2012, 10:58 am

    Thanks for the mention!

  • Lance@MoneyLife&More November 8, 2012, 11:37 am

    If I ever get into freelance writing I will definitely.itely be applying this lesson. I feel most people do undercharge for their services but I wouldn’t pay more unless they asked.

  • Pelican on Money November 9, 2012, 1:55 am

    I used to give free advice to everyone. Now I charge $100 an hour. And when someone asks me for tangible work – I think of a number, then multiple it times 2.5 = that’s the final quote unless you want extras.

    • Carrie Smith November 10, 2012, 2:55 pm

      That’s a very smart approach! I tend to fall into the “free advice” trap, but your strategy makes sense and I’ll have to start implementing it.

  • Robb @WatchOutForFlyingNinjas! November 9, 2012, 3:01 am

    This is something all people in the workforce need to be really acquainted with – what is your value in the marketplace? I really struggled with this concept – and still do because I didn’t really think about it much until a year or so ago, I’m stuck playing catch up. A lot of it depends on what it is that you do – like in my case, being a software developer a lot of it is tied to previous experience. However that experience also needs to be in demand, someone with a lot of experience in Java or C#/.Net will probably find more takers than a TurboPascal developer. Something else to consider is how much your value will go up after you get in the door – and this applies to both clients and your employer. If you get hired and develop a reputation as an efficient, quality worker, a goto person, whatever you want to call it – you develop more value as well. I guess you can call one external value – the value you have when the business relationship is just beginning, then internal value – which is what is cultivated after the business relationship has been going on for a while.

  • Krystina Feucht January 8, 2013, 9:56 am

    I know you wrote this blog a while back, but this is the 3rd time I’ve been back to read it because the topic keeps coming up. We get asked by clients about how they can do this. Super great blog Carrie!

    • Carrie Smith January 10, 2013, 1:01 pm

      Thanks so much @twitter-454599495:disqus! I’m so glad you’re using it as a helpful resource. Please let me know if there’s anything else I can do.