Whether you have started making money from home in addition to your day job, or you’ve taken the plunge and started working exclusively for yourself, the overriding concern that can weigh very heavily on you is the financial aspect. After all, if you have left a full-time job, with a decent salary to do something you love, it is, in many ways, like starting again. So, if you are working for yourself, what are the common concerns, and how can you bypass these to ensure you have a healthy and happy life but not fall into the usual self-employment trappings?
Yes, it is certainly easier said than done. But you need a considerable buffer should something arise in life that means you will not be able to work. Living a hand to mouth existence, by being self-employed means that if any extenuating circumstances come up, you have to focus on earning money, which means that you aren’t necessarily focusing on the important problems in life at that time. This is a very difficult position to be in. And this is why it’s important for you to have some savings buffer in place. If you are struggling at the very outset of self-employment to make rent, how are you going to be able to support yourself, or even your loved ones, should there be a problem that comes up out of the blue, and there’s nothing you can do about it?
A very good example would be if you got ill, and while it’s a joke made by self-employed people that “there’s no time to get ill” if you find yourself at a point where you are physically unable to do your job, how are you going to cope? And what’s more, how is everyone else around you going to be able to cope? If you are the breadwinner, not only are you unable to support your dependents, but the stress of not being able to do this could very well mean you taking longer to recover. Savings is a godsend, even if you have a month’s worth. And if you cannot squirrel this amount of money away, consider extending your overdraft limit, or find a way that your debts or outgoings are very limited. Ultimately, if you find yourself in financial trouble, there are resources online to help you, but the act of going through all of this can be particularly stressful. Depending on your own temperament, it may be better for you to have enough savings, so should you ever fall ill, you don’t need to worry about making the payments.
Having A Backup Plan
Having a backup plan at the back of your mind is essential. It’s always best to prepare for the worst-case scenario, and whether this means living off the bare essentials, or it’s about having a literal or figurative insurance policy in place, it’s a far better way for you to have peace of mind. Because the very act of being self-employed is living, in many ways, on a precipice, this can cause a lot of anxiety. If you are unable to earn, are you able to keep everything afloat? You can always use savings if you have some, but if you don’t, is there something you can pay into every month that doesn’t cripple you financially? There is some information at CompareTheMarket.com on self-employed sickness insurance. If you don’t have a large sum of money, and you are very concerned that you may get ill from time to time, having a policy that pays out should you be unable to earn is common sense.
It’s very much the same as sickness pay when you work in full-time employment. When it comes to being self-employed, however, a lot of the perks that you once had are not typically achievable. In which case, it will be beneficial for you to adopt more of a money saving mindset, as you don’t have the perks of holiday pay, sickness pay, and so forth. It’s a very delicate balancing act to get right, especially if you are earning a lot one month, but not so much the next.
This is something that can severely impact your state of mind, especially when you aren’t earning as much money as you used to. Ultimately, if you are doing this for your happiness, you need to make certain concessions, and your financial outgoings is actually one of the best places to do it. We seem to think that we need lots of money in order to be happy, but there are simple ways for you to maintain a healthy and happy existence, just as long as you have a suitable backup plan on those days when you aren’t earning as much. For example, if you are used to a certain lifestyle when it comes to food, can you batch cook and freeze certain meals? You can make it a goal, one day a month, to make lots of meals and batch cook them, before freezing them. This is something that can take a while to get into, mindset-wise, but it’s one of those great ways to save money on the most expensive of outgoings in our day-to-day lives.
That Dreaded Tax Return
This is probably the thing that most newly self-employed people dread. A tax return can be a very complex affair, especially when there are so many different codes and complex terms to navigate. But in essence, all you need to do is to keep track of how much you earn, but also, keep track of your expenses. By getting these right, you will make life easier in the long run. Having a system to keep you on track will prove to be the most beneficial way to get through this. There are so many intimidating aspects, especially when it comes to the dealings with the IRS, but professional help can be a godsend in this respect, even law firms like on AlexanderLawFirmLLC.com can provide you with details should you have a run-in with the taxman.
The bottom line is when it comes to your tax return, an organized mind is the best plan of action to tackle it. You might think that you need certain mathematical skills that evade you, when in actual fact, as long as you’ve got the means to add up exactly what you’ve earned in a specific year, but also keep an eye on what your expenses are, this will be sufficient, to begin with. Yes, there are more complex issues, such as what items are tax deductible, but this is where you can go online and view what the IRS or your national tax service defines as deductible. Sometimes, we don’t know what we can claim for, and as such, we don’t claim for anything. This is a very common thing to do at the very outset of your self-employed life, and as a result, you can end up paying more tax than you could realistically afford. A little bit of research will go a long way and save you more money than you realize.
How To Keep Yourself Happy
For all of the complex questions you need to ask yourself when it comes to ensuring you are financially afloat, your happiness can slip to the bottom of the priority list. Keeping yourself happy in this environment, where money can be threadbare, is vital. You need to ask yourself why you went self-employed in the first place; was it to follow your passions? No doubt, that is the correct answer, and so, you still need to consider your overall happiness in the grand scheme of things. But, luckily there are simple approaches to keeping yourself healthy and happy. While a lot of people talk about the benefits of meditation, if all you can do is focus on your debt when your eyes are closed and you’re attempting to think of nothing, it’s far better for you to take the approach of breathing exercises or anything that takes control of your autonomic nervous system, and therefore, reduce stress.
But at the same time, you need to ask yourself whether you are happier being self-employed, because there are so many things you have to sacrifice in order to maintain this quality of life, it could be a lot of stress for minimal returns, financially and emotionally. Of course, if you find it it’s not worth it anymore, you can always go back to employment, but this is something you need to come to the conclusion of all by yourself. For a lot of people out there, self-employment is the way to go, because they are taking control of their lives. This, for so many of us, is the one defining factor, regardless of pay or quality of life. The fact is, taking control automatically equates to a better quality of life. But for a lot of people, they would prefer to have the perks and trappings that come with a standard job, no matter how dull the job is. But for all of the difficulties being self-employed poses, there are so many more positives.