Self-employed money management can be a wake-up call when you are new to the game. All the things your employer usually takes care of are now your responsibility, and it can all go terribly wrong. From account management to keeping money aside, here are some suggestions.
Always File Your Tax Returns
Do you like paying taxes? Don’t answer that! Whether you do or not is irrelevant; it has to be done. However, many people misunderstand taxes or simply ignore them. This is heading straight down a brown-colored river without a means of propulsion! Self-employed tax is the same as any other, but there are some 990 filing requirements, even if you are a non-profit. So whether you make money or not, always file a return. It helps the IRS and helps you out, too!
Keep Personal and Business Accounts Separate
One of the biggest mistakes you can make when self-employed is using your personal bank account for business income. At the most basic level, this is confusing as it can be hard to separate them out when you need to file taxes or submit reports. However, it’s also easier and more tempting to use the available funds! No matter what you do, whether it’s online content writing or construction, there are expenses, and a business account just makes life easier.
Self Employed Money Management with Apps
Managing money, especially for a business, doesn’t come easy to everyone. Financial issues, in general, are a common issue. In fact, 34% of self-employed people in the UK state they have trouble paying essential bills. You can get self-employment advice on managing money. However, for a reasonable price, you can use apps such as Honeybook or Dubsado that allow you to input income and expenses and can link directly to your business bank account.
Always Put Money Aside
It’s easy to forget you are responsible for everything when self-employed. All the money coming in needs to be tracked and used wisely. This includes putting money aside for emergencies at the business and relevant bills like insurance. But it also means using cash for pension payments and even vacation pay. This is vital because, unlike working for a company, you don’t get paid if you don’t work when self-employed. You don’t want a vacation with no funds!
Keep Track of Income and Expenditure Dates
Like life in general, a self-employment role has dates for when money will come in and when it will go out. Keeping track of these is vital. It helps you stay on top of bill dates, employee wages, and even your own self-employment salary. Apps like Quickbooks are excellent for staying on top of these. You can also use specialist apps such as Sage. A free spreadsheet is also a convenient way to manage dates. Or, if you prefer, a good pencil and notepad are just as handy.
Summary
Filing tax returns is a core aspect of self-employed money management. You can also use apps like Quickbooks to track money coming and going out. Remember to keep some money aside to pay bills and wages and even cover your funds when you take vacation leave.