Perhaps you’ve recently considered leaving your full-time job to undertake a new challenge in your career. From freelancing, or even turning your side hustle into a full-time gig, there are various reasons so many people have recently decided to permanently quit the workforce.
Due – Due
While self-employment does offer better flexibility in your schedule, the ability to be your boss, and having the relaxation to work from home, it’s no wonder more than four million people were seen quitting their jobs during January 2020.
Times have been changing since the advent of the pandemic, and extended lockdowns have shown people that starting their own business can be financially beneficial if done right, and not having to answer to anyone else can help improve innovation and productivity.
Yes, being self-employed has its perks, and it’s become undeniable that working from home, and being your own boss is a lot more attractive than being stuck in an office or having to work for a company that doesn’t have the same moral stance as you.
Starting a business, whether it’s in your hometown, or perhaps somewhere else also brings financial constraints, even if it looks like the grass is greener on the other side. There are a lot one first needs to consider before making any drastic changes.
So whether you may be currently caught in the middle of leaving your job, or maybe you’ve already quit, it’s time to start talking about the financial mistakes you may endure in your time as a self-employed individual.
From budgeting, time management, work-life balance, and saving properly – there are a number of mistakes freelancers and the self-employed are making, and this article will help you avoid those mistakes.
Not Budgeting Properly
Right from the start, it’s time to get your finances sorted. Now that you’ve left a steady job, and a full-time salary, you need to start budgeting a lot better. Counting every dime and nickel you spend, and cutting back on unnecessary expenses.
There’s a simple equation that works, and it’s one you can apply to either when you’re freelancing, or when you still receive a monthly paycheck.
Split your earnings as follow:
- 50% Needs: These will be important bills such as utilities, mortgage, rent, and groceries.
- 30% Wants: This can be for things you want at a certain time, such as luxuries, or eating out now and again but aren’t truly a necessity.
- 20% Savings: It’s advised that you put at least 20% of your earnings in savings, an emergency fund or perhaps return that money into the business.
If you’re operating a small business from home, or online, you will have to make cutbacks on your wants, as this will help you save a lot more, and you can use any excess cash to support the business.
Inadequate Use of Time
Perhaps one of the reasons you decided to work for yourself or start your own business is because it gives you the ability to spend more time with your family and do what you enjoy. While this may be the case, a lot of entrepreneurs, freelancers, and self-employed people still don’t understand the value of time.
Now that you have more time to do a lot of different things, it should be …….