Part of the modern way of earning money is going self-employed. A lot of people find that because they are bound by a certain wage, they find extra ways to earn money. Some start a side hustle, but others who have grown frustrated with unsatisfactory jobs and salaries, decide to jump right in and go self-employed. Some decide to go via the freelance method, whereas others will run their own business. But regardless of the avenue, for those that have family, who rely on you to provide for them, this can be extra pressure, especially if going self-employed helps you to live the life that you want. But how can you live in peace, knowing that you actually provide for your family as a self-employed person?
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Having Sufficient Protection In Place
As people are relying on you, you should give consideration to the worst-case scenario. If you are working for yourself, you may be earning plenty of money, but what would happen to your earning power if you suddenly became ill? It’s important to have sufficient protection in place. And it’s not just about insurance should you be unable to work, but it’s also about life insurance, so if the worst was to happen, you can rest safe in the knowledge that your children are provided for. It’s worth consulting a company like YesCanDo life insurance brokers as well as many others out there to get a policy that covers you. Life insurance is something you need in place regardless of your employment status. But when you are self-employed, you’ve got to think about what would happen if you were suddenly unable to work.
Learning The Fine Art Of Budgeting
The first year or so of being self-employed can feel like you’re getting more money in than you are used to. This is a very dangerous frame of mind. Because you’re getting more money coming in, you think you’ve got more to spend. But we have to remember that we will have a tax bill to pay. It’s important to get into the art of budgeting. Because sticking to a budget can prove difficult when you’re self-employed, as you’ve got numerous expenses, and you feel that you need to spend money to make money. A lot of it is about being really strict. You need to think about your everyday purchases, as well as what you think you need to spend for the business, and make sure you keep receipts for these. You also need to have a different account for your business dealings. It’s so easy to have your personal expenditure and your business expenditure in one account, but you need to differentiate between the two. This will make it easier to keep track of your budgets, but it will also help you know what is personal and what is business.
The Importance Of Expense Claims
Starting on the road to self-employment can mean there’s a lot to keep track of, and one of the biggest components that we don’t take advantage of is our expense claims. For example, if you work at home, you can claim a proportion of your utility bills. While you might be paying those bills anyway because you’re working at home so you are using electricity, water, and so forth, a certain proportion of this can be classed as an expense. When you are going out for a coffee, and it is related to getting additional work, this is an expense. It’s about getting it into your head that there are things that are incremental to the business. There are so many different things you can claim for, especially travel costs. If you drive your car to meet up with potential clients, part of your petrol cost can be classed as an expense, just as long as your vehicle is registered for work purposes. This is, again, why you should have a separate account for business dealings. But when you think about providing for your family as a self-employed person, you need to know exactly what you can claim for. Because if you do your tax return, and don’t put anything down as an expense, you’re paying more money to the taxman, when you could class things as expenses, greatly reducing your tax bill.
Set Your Self-worth
Providing for your family when self-employed means that you need to, on occasion, look at your earnings and see if you are earning enough for your skillset. You may feel that when you are freelancing, it’s easier to drop your rates to get more work. But what happens is that once you’ve got into this method, you may continue to do work for a low rate. It’s also worth pointing out that doing work for free may seem good in theory, but this doesn’t put food on the table. It’s certainly something that needs addressing in a holistic sense. If you feel that a job that could lead to more work is worth doing for no money, it’s your call. But when it’s been a bit of a struggle recently, you may want to think about doing something for free, but you have got to look at it in the long run. Set yourself a limit, perhaps one project a year. By setting minimum fees, this will help to reinforce your self-worth. It’s so easy for us to lower our prices over time, that before we know it we’ve lost all sense of our skills. Part of it can be to do with the demand for the work that you already do. Maybe other people do it cheaper but if you can find a niche, this can help you to redefine your skillset.
Providing for your family when you’re self-employed is a steep learning curve. Part of it is to understand what you can realistically do to earn a regular wage, but also understand that there are limits. Part of being self-employed can mean lots of late nights and early mornings. This means that we may start to prioritise our work without realising it. Being self-employed can give you control of your earnings, but you still need to have control over your life.
