Most of us dream of being our own bosses. You imagine being able to work your own hours, keep all your earnings for yourself, and never having to deal with a horrible boss. In reality, you need to work longer hours. These are usually the hours that suit your customers or clients so they could even be unsociable hours. And most business owners have had to deal with the ‘customer from hell’ more than once. As for your earnings? You’ll still have to pay your taxes and other deductions. But now you have to spend the time making those declarations yourself!
There are many reasons for giving your own business a go. You may have recently lost a job and been unable to find anything else suitable. Or maybe you really can’t cope with being in an office environment anymore. Maybe you’re a recent graduate, but the jobs market has flatlined? Perhaps you just have enough faith in your business idea that now is the time to try and make your dreams come true!
No matter what age you are, it’s never too early to save for a pension. When you are employed by a big company, they will often pay a contribution to the workplace pension plan you are eligible for. Now you have no extra payments going in. Put away as much as you can for as long as you can. This will increase the monthly income you can withdraw from it when you choose to stop working.
As you start to generate an income from your work, you will need to consider putting some of it aside. Most people are only required to pay taxes and other deductions once a year. This will be a pretty big bill by then, so you’ll need to save a percentage of your income to cover it. Self-assessment of your taxes is the most common way to declare your earnings and accurately calculate what you owe in deductions. Don’t forget to include details on your student loan tax deductions if you are eligible. This could save you a lot of unnecessary spend.
Image thanks to 401kcalculator.org via Flickr.com
There are other tax deductions that you may be able to claim. Many expenses that you incur as you run your business may be deducted. As your self-employed work generates more income, you might want to consider using a formal accountancy service. This can help you fill your returns. The professional advice you receive should help you make sure you are saving as much cash as possible. You can be assured you’re also declaring everything you need to.
Taking vacations means you are taking a break from work. Unless your income can be generated passively, you need to cope without any cash coming in during that period. Careful budgeting for your business and household is essential here. This will help to avoid cash flow problems or debts. You could also hire a remote or virtual assistant to ensure customers are still cared for in your absence. Going it alone could be the most challenging, yet rewarding, move you make.