Self-employment comes in many different forms, and while the way you operate your business may differ (you could be a store owner, a freelancer, or a contractor), the way you go about preparing and maintaining your finances as a self-employed individual will basically stay the same.
Maybe you’ve already started your business or you’re just thinking about leaving your full-time job to break out on your own – either way, if you follow the next 5 tips you can bet you’ll be set up for financial and business success!
5 Financial Tips for the Self-Employed
Utilize a separate business account
Even if you are a solo-preneur with a small start-up business on the go, it is incredibly smart and savvy to open up a business account. Do some shopping around to make sure you get an account that makes sense for you and your business, as there are usually service fees and other requirements necessary to operate a business account.
That said, utilizing a separate account will make your life a lot easier down the road when it comes to calculating your business earnings, especially if you have a side hustle or part-time job that pays into your personal account.
It also makes sense for you to pay all of your business expenses from this account, and take out a set amount of money bi-weekly or monthly (think of this as your take-home pay or pay check).
Put a % of all of your take-home pay into your savings
It is incredibly important to have an emergency fund and a healthy savings account when you are self-employed. Sometimes there can be quite a lot of financial pressure or strain to keep afloat (personally and business-wise) during slow months, or if a client hasn’t paid you on time, or you’ve had to hire a couple extra staff members, and many other things that can affect your cash flow.
No matter what – you need a roof over your head and food on your plate, so make sure you have a nice safety net set aside. Contribute to your savings on a VERY regular basis, whether it’s stashing away 15% of your take-home pay or meeting a flat-rate monthly goal.