How Can I Look After My Money?

(Collaborative post by another author) When you work for yourself, it is important that you consider the different things you might need your money to do. In doing so, you may be able to help keep on top of payments due to be made, official reports or returns, and even help to prevent security breaches. You may have been working as a self-employed individual for many years, be in your first few months, or still considering starting a new career. No matter how long you have been self-employed for, it can always be a good idea to keep checking in on how you are managing your finances.

A hand holding a fan of £10 and £20 notes
Looking after your money when self employed

You may have had a guaranteed income each week or month at your previous place of employment, however this usually isn’t the case for those who work for themselves. If you start your ISA now, which is a tax-free savings account, you may be able to accrue interest over the coming months. This way, if you have a slower month, or no work at all, you may be able to successfully subsidise your income. One of the benefits of an ISA is that it is also risk-free, meaning you won’t lose money along the way. Learning to save money throughout the course of your self-employed career could make a big difference. If you end up not needing the money, some of it could then potentially be funnelled back into further growing your business.

You may also want to simplify the way that you track any income and expenses associated with working for yourself. This can make it a great deal easier to submit your tax returns when the time comes. At the same time, it can be good to keep hold of invoices that you sent to clients, as well as receipts from items purchased to further your business. Looking after financial documents, and keeping track, may also give you some insight into which months are most lucrative for you, and which are more of a struggle, you can then use this information in future years to create a financial forecast.

While some clients may pay for your goods or services with their card, or even a bank transfer, some might still prefer to use old-fashioned cash. When this is the case, you may want to make sure that this money is protected until you can deposit it into your account. At the time of the transaction, you might want to use a light or pen which can allow you to tell if a note is counterfeit. Following this, storing cash in a secure safe, preferably bolted to the floor or wall, can greatly help to deter thievery, even if they have already broken into your home or workspace. 

Thinking about how to keep your money safe can give you a great deal of peace of mind, especially when each aspect of the business is your responsibility. Making smarter money choices, and documenting properly, might also reduce the work you need to do later down the line.

Please note that this post should not be used in place of professional financial advice.

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