When you are self-employed, traditional strategies for saving simply do not work. After all, it is not like you receive the same amount of money each week or each month. Moreover, you may experience a drought or flood, when it comes to work. That is why you need to take on a different savings strategy.
Therefore, if you are one of the approximately 15 million self-employed people in the U.S., you may find it a challenge to save. After all, you don’t’ receive regular paycheck or make regular tax contributions through an employer, so you have to view saving money differently.
Don’t Pay Yourself First – Pay the U.S. Treasury
When you are self-employed, you have to ignore the old adage to “pay yourself first.” This little piece of advice is not applicable when you are a solo worker. In this case, you have to give some of what you earn to Uncle Sam first. Set aside taxes, as you don’t have an employer who can intervene. Once, you do that, you can establish a budget and save for an emergency or retirement.
When you are self-employed, it sometimes feels like you are playing Bingo – a great game when you win, for sure. However, you also have to make allowances to ensure a winning streak. That means, when it comes to savings, it is better to think in terms of bonuses or percentages.
You can also find these types of incentives on Bingo sites online. After all, when you are an entrepreneur, there are various ways you can save or make your fortune. For instance, read more about Bingo bonuses for new sites by following the link.
Think in Terms of Percentages When You Save Money
Just like Bingo, fluctuations to income or “winnings” will happen. Therefore, you do not want to allocate a specific dollar amount to your retirement savings plan or emergency savings account. Doing so will cause you to save too much or too little, depending on what you are currently bringing in.
Therefore, to “win” at the savings game, you need to allot a certain percent to what you make for taxes, emergencies, and retirement. That way, you can contribute more money to your important financial needs when the cash is flowing your way. As a general rule, always save 10% for emergency savings.
To make sure you save enough money, you need to set up a budget that sets out everything in clear terms. That way, you won’t have to “guess” what to save or spend. In fact, before you set up your budget, keep a financial diary. See how much you are spending and see where you can make some cuts. You, no doubt, will need to make some savings and spending adjustments.
In fact, many people are stunned when they look at their diary and find out what they have spent on basically unnecessary stuff. By keeping a diary first, you can make a significant improvement in your spending and saving habits. Set up your budget, so you can also record all of your business deductions. Invest in a good accounting program, such as QuickBooks, so you can stay on top of your business bookkeeping and personal budget needs.
Deduct Your Home Office Space
When making deductions, don’t forget to make an allowance or deduction for what you use for an office space. In fact, you can deduct the percentage you use for an office space in your home as well as a percentage in what you pay for your utilities and an Internet connection. These deductions will be helpful to note when you file your taxes. If you use a landline phone specifically for business, you can use the deduction and direct the savings somewhere else.
Where You Can Deduct and Save
You have more of an advantage to save as an entrepreneur, as you can also track your business expenses. Keep receipts of any costs related to business entertainment, travel, and similar costs. You can also deduct for postage, office supplies, and subscriptions. In addition, deductions can be made for computer software and upgrades to your computer system.
You can save money as an entrepreneur. You just need to focus on what you can save in the form of deductions and what you can set aside as a percentage of your income. That way, you can realize a better cash flow and a way to access funds when times are slow.