One of the advantages to being self-employed is that you have no income limits; this is also one of the biggest disadvantages of being self-employed. While you have no limit to how much money you can potentially make, you might not always be able to guarantee that money will come in at a regular pace. For that reason, you have to be conscious with your money and save, spend and utilize it wisely. Here are three ways to stay on solid financial ground when you are self-employed.
One of the biggest mistakes the self-employed make is assuming they will make a specific dollar amount each week/month/year. It’s always better to underestimate what you think you will make so that you don’t overspend or over budget yourself before you actually have the funds to pay for what you’re doing. You don’t want to spend all that money only to realize that you haven’t the income to pay it off.
Have an Emergency Fund
Some months are so lucrative you can’t remember why you ever worried about your finances. Other months are so dismal you worry constantly. It’s just a fact of life when you’re self-employed; some months are better than others. The best way to eliminate stress and stay on solid financial ground during this time is to have an emergency fund. Don’t touch it unless it’s a dire emergency. It’s good to have when your business isn’t pulling in as much as you expected because you’re having a somewhat slow week or month.
Think Twice about Every Purchase
Never make a purchase on a whim. One of the best things about being self-employed is that it will teach you to be savvy with your funds. It will teach you to think twice about every purchase you make. It will leave you with fewer impulse purchases and feelings of buyer’s remorse. It will also help you to only end up with what you really need rather than a bunch of stuff you thought you wanted.
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