Thirty Two.

Accident & Emergency! Making sure you have a financial safety net.

This week Frankie Tortora and Steve Folland have a chat in response to a question from freelance writer and educator Fiona Tapp. She says:

“I live in Canada and yesterday I slipped on the ice walking back from school and hurt every single bone and muscle in my body.

I am not seriously hurt but I am sore and don’t want to work because it would interrupt my self pitying calls to my mum, copious biscuit eating and catching up on every single episode of Scott and Bailey on Netflix.

My question is — to protect against times like these or even more serious periods of not working, how much money should a freelancer have saved for emergencies and how do you start a fund that you don’t pilfer from when you fancy a holiday or whatnot?”

• • • • •

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Take note dear listener! We might swear a bit. This one’s for the parents. To be enjoyed at your desk or once the kiddos are in bed.

Here’s what was said in this episode:

Comments on the previous episode:

[00:01:20] – Frankie
Hello, you’re listening to the Doing It For The Kids podcast, where we swear a bit too much and talk a bit too fast about freelance life with kids in the mix. My name’s Frankie and this is Steve.

[00:01:30] – Steve
Hello! Yes, each week we take a question from the Doing It For The Kids community, do our best to answer it, and then we come back the following week with answers that you’ve given us on Twitter or Instagram or in the community.

Okay, we’ve been off for three weeks. Anybody remember what the question was?

[00:01:47] – Frankie
I think it was about having two… like, going from one to two kids. Leveling up in the parenting stakes!

[00:01:55] – Steve
Oh, well, that makes sense then because Jo Breeze got in touch.

Jo said,

“The jump from zero children to one child is enormous. The jump from one to two is much smaller. But yes, there is zero time off. We weren’t even using childcare until the eldest was three. So with the eldest child in nursery and then later, school, you will get a bit of breathing space while you adjust.

I found the hardest bit was once our new tiny baby turned into a toddler and started walking around. Suddenly I couldn’t leave them alone for long enough to have a wee, let alone a shower, because eldest had strong feelings about being followed around or his toys taken away…

But I am reliably informed that the tiny, constant supervision stage is only a handful of years in the decades of parenthood. And they do apparently grow into moderately self-sufficient humans who might even quite enjoy each other’s company sometimes.”

[00:02:46] – Frankie
Cannot wait for that day.

Your cat just wandered past and I was like, “is there a toddler in the background that I don’t know about?” but no, it’s a furry friend.

[00:02:56] – Steve
Was he walking on both feet? Like when the cat in the Simpsons was trying to get their attention? Was he standing on a ball juggling?

[00:03:06] – Frankie
Holly Dabbs says,

“Love this so much! Eleven weeks into having two. First is two and a half and it’s hardcore and non-stop. Both me and my partner are freelance. I’m just trying to be kind to myself and take it a week at a time. Hopefully, by week 12, 13 and 14 it will get better.

Also, Mr Tumble is my daughter’s third parent. Just do it. As Frankie says, if you think too much about it, you never take the leap. Baby number two is amazing and love does conquer all.”

[00:03:33] – Steve
Dee Primett has got in touch. Dee, thank you.

Dee says,

“IT WILL” in Caps Lock, “BE FINE. It is just a huge adjustment.

What I would say is to be prepared for the fact that the chaos will last well into their teens.”

[00:03:46] – Frankie
Oh, God.

[00:03:47] – Steve
Dee continues,

“It will just be different. Husband and I are both self-employed and work more than 100 hours a week between us usually. Our kids are 13 and nearly ten. Life is still chaotic, but just in a different way. We don’t need to change nappies or sit and read with the kids before bed every night. However, we do regularly have appointments to attend in the daytime for one or both of them. They are awake later at night, meaning the time I used to use to catch up with work, I can’t always use now. And I spend a lot of time working in the car whilst waiting to pick one or both of them up from clubs, friends.”

Actually, that was something I found in half term. I’ve mentioned before that our kids now go to bed later. Like, maybe they’re not asleep until like, half eight. And so it’s really hard for me to then find the motivation to work in the evening. During the holidays, it was more like nine, half nine. And you’re like, “I’ve not done any work all day and now I can’t face doing it now”. It’s a constant readjustment.

Our answer to this week's question:

[00:07:36] – Frankie
This week’s question comes from Fiona Tapp, who is a freelance writer and educator.

Fiona asks,

“I live in Canada and yesterday I slipped on the ice walking back from school and hurt every single bone and muscle in my body. I’m not seriously hurt, but I am sore and don’t want to work because it would interrupt my self pitying calls to my mum, copious biscuit eating and catching up on every single episode of Scott and Bailey on Netflix.

My question is — to protect myself against times like these or even more serious periods of not working. How much money should a freelancer have saved for emergencies? And how do you start a fund that you don’t pilfer from when you fancy a holiday or whatnot?”

[00:08:15] – Steve
Oh Fiona, who’s in Ottawa. Hello, Fiona.

[00:08:20] – Frankie
I’m guessing there’s a lot of ice in Ottawa. I don’t know.

[00:08:22] – Steve
A lot of French speakers as well. Maybe we should say bonjour Fiona?

[00:08:25] – Frankie
You love a bit of Franglais.

[00:08:27] – Frankie
La neige.

[00:08:30] – Frankie
Oh, no.

[00:08:31] – Steve
Oh, God. Is that your shopping?

[00:08:32] – Frankie
Yeah, but Rob’s here, so he’ll have to deal with it. Hang on…

[00:08:41] – Steve
*Your listening is held in a queue. Your ears are important to us. We will get to your podcast as soon as possible.*

[00:08:55] – Steve
Okay, so I think it’s a very good thing to think about, and I think it’s also good when it’s something minor that ends up making us think about this rather than the worst case scenario. I think it’s a good idea to think about worst case scenarios, not to depress us, but to think about ways that we can protect ourselves for when they happen.

Actually, when I first started as a freelancer, I was out for a run… I’ve probably mentioned this before. But I got bit by a dog and was off work. But I remember thinking, “what if it had bit my arm rather than my leg? What if I couldn’t have properly worked for months?” I didn’t have any savings — which is obviously what we want to work towards.

So, yeah. I didn’t have any savings. So the best idea, to me, was to take out something called ‘income protection insurance’, which is basically a policy where you pay a premium each month and then they will pay you a salary based on what you currently earn. You do have to prove it. You can’t just say, “I’m a millionaire, I’m a Premier League footballer”.

Yeah, the way it works is you can delay the payments so the payments won’t kick in for, say, like, two months.

[00:09:59] – Steve
And you pay a lower premium. Or you can get the payments to kick in after a matter of weeks, but you pay a higher premium.

[00:10:06] – Frankie
How do you activate it? How do you prove that you’re sick? Is it like a letter from the GP job?

[00:10:12] – Steve
Yeah, you would have to genuinely…

[00:10:14] – Frankie
I’m talking to you like you’re an insurance pro. Caveat, we’re not!

[00:10:18] – Steve
We’re not.

Yeah, you would just have to get an actual letter from a medical professional, saying, “this is why you’re not working”.

[00:10:26] – Frankie
Fine, okay.

[00:10:27] – Steve
And it could be something short term, like breaking your arm. It could be something more longer term if you take out the right policy.

[00:10:34] – Frankie
So I’ve been looking at critical illness cover. Now I’m confused as to what the difference is.

[00:10:39] – Steve
Yes, a critical illness is going to pay out a lump sum if you get one of their critical illnesses on their list, such as cancer. And it’s basically because previously everybody used to take out life insurance, but that pays out when you die. More like death insurance.

[00:10:55] – Frankie

[00:10:56] – Steve
And the idea is to support your family and pay off mortgages and stuff like that when you die. But of course, if you get a critical illness…

[00:11:04] – Frankie
You’ve still got to pay the mortgage.

[00:11:06] – Steve
Yeah, the impact, actually, to the people who depend on you as a parent is probably even greater. And it could go on for longer. It’s so ill defined, isn’t it? So often critical illness is bundled up with life insurance, but you can, I think, get it independently as well.

[00:11:24] – Frankie
Well, that’s what I’m trying to do, literally this week!

Yesterday I was doing research for my monthly newsletter that I send. Part of it is about audio and video stuff to do with freelancing or parenting or both. And I was flicking through the podcast stuff that I’m subscribed to, and I noticed there was a new episode from Properly Freelance, which is run by a woman called Jenny — I was on her podcast about a year ago.

And then I noticed she just kind of stopped and hadn’t come back again. And then I noticed last night there was a new notification against her podcast. And I was like, “okay, cool”. Went to see it and it was literally called… Let me find the title of the episode because it says it all.i

It’s called “Episode Twelve: Fuck, I didn’t see that coming”. That’s what the episode’s called. And it’s just five minutes of her saying that she’s been diagnosed with a pretty serious condition and isn’t able to work.

Amazingly, she had income protection insurance or something, so she’s getting a payout through that. And she was like, “I’m one of those super organised people that does that sort of thing, and I know a lot of people don’t. And this has now happened to me. This is happening to me. Make sure you do it”.

And I listened to that and I was immediately Googling how to get some. Like, why have I not done that?

[00:12:45] – Steve
The other thing you might want to consider — and actually living in Canada, you might already have to have this, but not in the UK — is private health care. So I only recently took this out. I’ll be honest, I always thought, “oh, private health care. It’s so kind of snobby and elitist”. And for all of my life, that had been my attitude. And I love the NHS, and actually they tend to be really good for urgent things. So this is probably less about cancer, but more about more about things which are debilitating but not urgent, but are still going to affect the way you can look after your family and your business as well.

So, yeah, I took out private health care so that if I get, I don’t know, a hernia or whatever, I can actually go and get it treated quicker so that I can be back to normal, hopefully quicker. And it feels like a luxury. I definitely wouldn’t have been able to do it a few years ago, but I think with any of these things, what we need to be able to do is to factor whatever the cost is, to just factor it into our pricing and consider it as a cost of our business. The same that we would consider Dropbox or our Macs or our broadband or whatever. It’s just something that we need to make sure that we can keep doing, right?

[00:14:02] – Frankie
But as you say, is that even realistic for lots of people to put that money aside? Because I’m in a position now where I feel like that ten pounds a month for critical illness or whatever, I have no qualms about doing that. But me, five years ago, every little monthly direct debit I was questioning myself on because my income was so tiny. I just relate to so many freelancers that are told this stuff all the time and just don’t do it because they don’t feel that they can afford to. I don’t know what the solution is to that.

[00:14:34] – Steve
I think maybe a good way of looking at it, right, is…

There was a recent article by Ross Wintle, who’s in the Doing It For The Kids community, right, and it was an article about online security and how to protect yourself. And he had, I don’t know, maybe ten levels of security. He made a really good point in his article, which was, “if you look at all of that, it feels overwhelming and so therefore you don’t do it”. He was like, “identify where you are on this list now and think, what can I do to take me to the next level? So if you’re using the same password everywhere, then the next level might be to use a password manager to create different passwords, but you still only have to remember one”.

And I think it goes the same with protecting ourselves. So if you have… Like, I had zero savings. In that scenario, maybe it makes sense to think, “right, maybe my next priority will be income protection”. But then at the same time start putting savings away. Little bit here, a little bit there, and then maybe a few years later you’ll be like going, “okay, I feel even more comfortable with my savings now. Maybe I’m now going to take out private health care” or maybe make a list of what those things are and rather than feeling overwhelmed, just take it step at a time and those steps might happen over years.

[00:15:50] – Frankie
This is all relevant in the context of being freelance, but equally is like on another level of importance when you also have children and a family that you’re supporting. I wouldn’t even have thought about this stuff when I was just freelance and didn’t have kids. I mean, I did, but I was like, “yeah, yeah, whatever”.

I mean, I appreciate, I was also younger, but it didn’t worry me as much. But now the thought of me not being able to work, not being able to look after the kids, how that would impact Rob, what would happen in a practical level would be huge.

[00:16:19] – Steve
Because that’s the thing, it might not just impact your income, but your partner’s income if it’s the two of you.

[00:16:27] – Frankie
Because somebody’s got to look after the kids. Yeah.

So, she talks about savings. How much should we have saved for an emergency? How do you save without pissing it away on fancy holidays?

[00:16:39] – Steve
Well, modern bank accounts — without wanting to sound like an old man! — have twigged that this is something that we need. And so a lot of them let you save from your current account into little pots towards certain things.

If you still don’t even think you could trust yourself with that, then you could create a different bank account. I did this with my tax, actually. I had one current account with one bank and then a different bank entirely for a savings account…

[00:17:06] – Frankie

[00:17:07] – Steve
…to siphon money off into. So that when I log into my current account, it’s actually hard for me to move funds from one to the other.

[00:17:15] – Frankie
And also, I’ve got one of these saving apps that saves stuff for you. It’s called Plum, the one I use. I’m sure there are more. It saves stuff direct from your account, but it’s relative to how much is in your account at the time. So it literally saves every, like, three or four days, I think. And you set a level of how ‘hungry’ it is. Yeah, and it just like, ticks away in the background, depending on what’s coming in and out of your account. And I literally don’t notice it at all.

[00:17:43] – Steve

[00:17:43] – Frankie
And then I log in and it’s like, “you’ve saved 300 quid”. And I’m like, “oh, wow!” Yeah, it’s just kind of magic. I love it.

And I think a lot of the time, as with pensions — I mean, that’s another episode… — but, like, freelancers are getting painfully left behind. So my situation is like this, and I imagine yours is similar in that your partner has an employed job where they get perks from their employer, and one of those might be private medical insurance, for example. It can become so unfairly weighted to one partner over the other. But what we’re doing is as important, if not more important, in that we are looking after the children the majority of the week. Like, the impact of us not being able to do that part of our job is massive, but we downplay that and we don’t protect that because there’s no monetary value associated with childcare. Blah, blah, blah, *insert rants here*.

But really, it should be the opposite. It should be paramount that we’re making sure that that is protected.

[00:18:45] – Steve
Think about the boss that you want to be to yourself. A contract that you would give to yourself.

[00:18:52] – Frankie
Yes, love that. I feel like this is the most, like, hard hitting, serious episode we’ve done so far.

[00:18:59] – Steve
So we would love to know your comments. Like, has something happened like this to you? Have you put something in place? Tell us. Tell us what your answer-,

[00:19:06] – Frankie
Are we missing a trick?

[00:19:07] – Steve
And can that trick help Fiona? Let us know. You can do so on Instagram, Twitter, or right there in the Doing It For the Kids community. Come and join us. You are searching for, by the way, for episode 32. So, yeah, let us know your comments and let us know your questions.

What would your advice be?

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