I have been self-employed for a few years now and although I love it, it does come with its challenges. On some month, I am super busy and my bank account is smiling. And some other months, it can be super quiet. One minute I could be wondering how to pay some bills, and the next minute I could be laughing all the way to the bank. That is pretty much the life of a freelancer/self-employed person. Our income fluctuates and there is so much financial uncertainty but I won’t trade it for a job in an office with a regular pay check. The pros of being a self-employed person massively outweighs the cons for me, which is why I do what I do.
You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want
Having said that, the key to surviving the self employment world is to have a budget. I love reading finance self-help book on my Amazon Kindle. The book I am currently reading is You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want by Jesse Mecham. It is the first book I am reading this year and I am loving the budgeting tips and advice. I have picked a lot from this book and I recommend it to anyone struggling to make the most of their money. You need to read this book. It is full of wisdom and valuable tips.
Everyone needs a budget regardless of what you do for money. Business owners and freelancers need a budget more than everyone else because of the income fluctuations. Having a budget helps you plan your money and make your money work for you. If you budget right, you can survive on periods where work is quiet because you would have saved money from the busy months.
Self Employment on a Budget
I am going to be handling my money a little differently this 2019. Generally, I am good with money but there is always room for improvements, and I plan to be better this 2019. Here are some things I would be doing more of –
Ageing my money
Jesse Mecham advises us to age our money. What this means is for us not to spend all of our money as soon as it comes in. This makes a whole lot of sense. Ageing your money allows you think smartly and set your priorities straight. It takes off the stress of having no money in your bank account and it allows you plan your life. Ageing your money allows your money wait on you instead of you waiting on your money. It sounds pointless but it works. Trust me, I have tried it. The longer you can age your money, the better. I aim to age my money for at least 30 days. It is a work in progress but I am slowly getting there.
Spend less than what you earn
This should be common sense but it is amazing how we spend way more than what we earn. Which leads to us having to use our overdraft facility, store cards and credit cards to make up for the difference. Spending less than what we earn is the way to financial freedom.
Grow the savings
Having money saved away is the way to survive self employment. With the income uncertainty, you never know for sure when you would be short, so it makes sense to always have money stashed away for when the need arises. Growing the savings is one of my many goals this 2019.
Make more money
2019 is the year of making more money. That is another goal I plan to seriously work on this year. The way to financial freedom is to have many streams of income. I am planning on working hard on making money via affiliates and I am using an affiliate link in this post for the first time in a long time. Having many streams of income means you have various ways of making money. No one should ever rely on 1 pay check.
Do you have a budget?
*Affiliate link used.
I have not heard age the money before. I like that. Yes I have a budget. I am much better with money than I used to be. Still much room for improvement though.
It helps that my adult youngsters are all financially settled now so I am not the ATM anymore like I used to be
I have always known about the ageing the money idea but never knew it was an actual tip. It does help when you don’t empty your bank account after every payday. Good the kids are settled financially. You can rest up now 😊
I’m working my way towards being self-employed and I love reading your self-employed/finance themed posts and the books that you recommend on the subject. I’m on a sabbatical from my usual career this year and I definitely agree with the ageing your money idea. Even just waiting a couple of days before spending can help so much in setting priorities straight and certainly in avoiding impulse buys/sales. An excellent read – looking forward to more of this 🙂
Good luck with your self-employment journey. Reading finance books and posts would help you in knowing what to expect. Thanks for stopping by 😊
All of the above! I’ve been a self employed writer for 20 years … and it has huge highs and huge lows. The key to surviving is to prepare for both scenarios. Only spend money you have – no credit – and put as much aside as you can, as a rainy day fund
Wow 20 years is a long time. Well done Tracey.
I have been self employed for a few years now too and found the last few months of last year tough as I hardly got any paid work compared to normal. Hopefully 2019 will be a better year
It was quiet for me too! I think many of the campaigns ended quickly last year.
Totally agree there are many highs and lows in being self employed. I’m aiming to make more money this year, fingers crossed 🙂
My odds be in our favour. Have a great year 😊
Yep, self employment certainly has the good and bad moments. For me writing my aims down is key xx
It is key. Thanks for stopping by xx
We have a budget that we try to stick to, but it’s so hard when unexpected things come up….like two new pairs of school shoes this week! I want to work on having a pot of money that doesn’t need to be touched so we can use that for unexpected things
The unexpected bills can be tricky the you are self employed.
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good article, I was able to scale up to 6 figures a year. learning how to use the internet as a marketing tool and coming up with own system. What I learned is when you are self employed that you cant put all your eggs in one basket. The key is creating multiple sources of income, this way if one is slow you have others to pick up the slack…
Very true. Good you are doing so well.
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Yes very hard to smooth out the peaks and troughs especially when there is a delay between engagements. Often this may be able to be helped a little by increasing your rate if the market supports it. In Nz I tend to work in thirds. A third for me. A third to save incase work slow down and a third for the tax man. Great post thank you. Stacey
Working in thirds is a great idea Stacey. Thanks for reading 😊
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