Working for yourself has plenty of benefits; flexible, family friendly hours, the opportunity to pick and choose your clients, the ability to go on holiday without consulting a schedule, and being able to work unmonitored are just a few. The one downfall, though, is almost certainly the financial element – invoices often go unpaid for months, you’re not entitled to sick pay, and the cash flow is unpredictable. With a little careful budgeting, though, you can work around the negatives and enjoy life to the full – here are four top tips to show you how.
Find Out What’s Tax Deductible
The first thing you should do is make a list of all your expenses, and then find out what is tax deductible – they will be taken off of your final profit for the year when you file your return, and you’ll only pay tax on the remaining amount. It can be hard to work out what is and isn’t on the list of acceptable deductions, and it can vary depending on the type of business you’re running – so the best idea is to head straight to the IRS website and read through the documents thoroughly.
Get The Best Deal For Your Bills
Once you’ve worked out what areas you can save on for your tax return, it’s time to get saving on those day-to-day bills. The first stop should be looking for cheap business gas and electricity – shop around and do some comparisons to find the best deals, and make sure you’re not being overcharged for your usage. You should also look into business accounts for your internet and mobile phone service, and opening a business bank account is also a wise move – make sure you shop around first though, as each account has various positives and negatives.
Track Your Spending
As a small business owner, it’s incredibly important to track your spending – not only for business related costs, but also for personal spending. You should remember that you won’t have the same regularity of income as you would if you were employed by someone else, so you need to aim to keep a fairly healthy buffer zone in case of illness or injury.
You can use dedicated software to track and control your spending, but over complicating the issue can be off-putting – setting up a simple spreadsheet of incomings and outgoings is a great starting point. Just remember to keep those receipts!
Be Frugal Where Possible
When you start out in business, it can be an expensive time – so it pays to be frugal elsewhere in your life. Cut costs by avoiding takeaway coffees, and using a reusable flask to bring a drink in from home, and the same goes with lunches – it might be tempting to pop to the deli for a sandwich, but you can make something similar for a fraction of the cost at home.
When grocery shopping, look at what’s on offer and think about how you could incorporate it into your meal plans for the week – also, avoid expensive brands and opt for grocery stores own versions; they’re often just as good, if not better, and are much more budget friendly!
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