Submitting confusing invoices, keeping track of your finances, that excruciating wait for your hard-earned money to finally come through – being self-employed can be a bit overwhelming at times. 

Balancing everything can equal a lot of worry, especially when you’re first starting out. How do you manage the money? The unguaranteed workload? Your financial security? The trick is to focus on the things you can control – you have a lot more power than you first might think. 

Here are some top tips on how to use that power to your advantage and get ahead financially.

Goals

Money can take you anywhere. Maybe you’ve started your business or taking on extra contracting jobs because you dream of funding the kids’ education, buying a new car or even retiring early. Setting specific goals as your financial destination will kick-start your plan on how to get there and motivate you to stay focused and clear on your financial situation. 

Debt

Wouldn’t it be incredible to be debt free? Taking out loans can be helpful, especially when starting a new business or studying. But debt can quickly turn sour if you don’t keep track of what you owe. Start with tackling your high-interest debt – things like credit-card charges and payday loans that will be costing you the most money. Focus on paying those off and feel the euphoria as an instant weight falls off your financial shoulders when they’re cleared.

Emergency Fund

Always have a financial safety net. Something is bound to happen where you need that extra bit of cash and by having some money tucked away you can be ready for anything. Do it now! Try selling things you don’t need or taking on a bit of extra work and keep some rainy day money safely on the side in its own account – even $1000 should help take some stress out of a financial emergency. Trust us, you’ll be glad you did it.

Long Term Savings

KiwiSaver (https://www.kiwisaver.govt.nz/new/situation/self-emp/) is still worthwhile even when self-employed. It can earn you 50 cents for every dollar you contribute up to $1,043 a year – that’s an extra $521 for nothing! Don’t put retirement to the back of your mind either. Run your numbers and check that you’re working towards the future lifestyle you’re dreaming of.

Taxes

As Benjamin Franklin once said“in this world nothing can be said to be certain, except death and taxes.”But tackling your tax doesn’t need to be as morbid as he makes out. There are online platforms available such as Hnry (https://hnry.co.nz/) that can take the hassle out of taxes when you’re self-employed. They are also a great way to help manage your money, especially when you’re dealing with the unpredictable income that comes with freelancing.

Insurance

Along with life, contents and health insurance, strongly consider Income Protection Insurance as a way of covering your future earnings. Without it, if something happens and you can’t work, you risk your family’s financial situation and also that of your business. Just because you stop doesn’t mean the bills will. With insurance you won’t lose everything if disaster strikes and you’ll have that priceless financial peace of mind.

By taking time to be clear and precise with your finances you can quickly get ahead of the game even when self-employed. Don’t just work for money, make money work for you.