collaborative post // If you’re new to the self-employed crowd, welcome! It’s a fun and exciting place to be. But working for yourself is also a lot of work, especially at the beginning.
Making the transition from being an employee to being self-employed can take some getting used to, and one of the biggest learning curves you’ll face will involve your finances. From how to juggle your personal budget to managing your business costs, you’re about to learn a lot about earning money through working for yourself.
Want to get your self-employed finances off to a great start? Here are eight cost-saving tips for the newly self-employed.
1. Keep your personal spending and outgoings low
As you get to grips with being self-employed, it’s a good idea to keep your personal spending and outgoings low while you figure out your earnings. Living a little frugally and learning to cut your monthly expenses can help you adjust to working for yourself and the possibility of variable earnings. Over time, you can increase your spending in line with your earnings. A great way to save money on your budget is to use a coupon or bulk buy.
2. Work from home to reduce your running costs
One of the easiest ways to save money when self-employed is to work from home. Working from home means you won’t have to find business premises or a co-working space, and benefit from all the comforts your home provides. While it may increase your home’s bills, you can claim a portion of your business expenses back when completing your tax return.
As your business finds its feet, you can start thinking about investing in an office space or workshop that can help your business grow.
3. Make sensible choices when it comes to technology and software
You may need to invest in some new equipment and technology to help you get your business off the ground. While it may be tempting to go crazy at first, it’s better to make sensible and more affordable choices for your business. Leasing your technology, for example, could give you more flexibility and keep your initial expenditure low.
Software is another area where you’ll want to make some sensible spending choices. You’re wise to ask ‘is cloud computing cheaper?’, as it most likely is in your case. Cloud-based software is usually available on a subscription basis, giving you different types of payment options, and the chance to scale up as needed. In time, you can review your choices and upgrade as needed.
4. Take a look at free marketing methods
When your business is in its early stages, your marketing budget can be non-existent. And that’s fine because there are actually a lot of free marketing tools to help you spread the word about your business.
There are a lot of ways you can spread the word about your business for free. Social media is a great place to start, but you could also benefit from local community groups and noticeboards, which can be a simple way to drum up some interest in your business.
5. Keep bills low by reducing your energy use
Worried about the rising cost of energy bills? Find ways to help keep the costs down. There are different things you can do to cut energy costs, including:
- Say goodbye to standby! Turning electronics off at the mains when not in use can save you more than you realise, reducing your overall consumption.
- Buy smart bulbs or plugs to help you dim lights and control power sources in your home.
- Make sure your home is properly insulated to help you stay warm. Hot water bottles and cosy jumpers are also great for keeping toasty at home.
- Don’t leave your tech charging all day, turn off your chargers if you have full power on your devices.
Monitor your energy use and take further action if you notice that your bills are creeping a little higher than expected.
6. Set a strict budget for your business spending
As with your personal spending, you’ll need to set a budget for your business expenses. When you’re self-employed, you can find your earnings change from month to month, which doesn’t exactly make it easy to budget!
Learn to budget for a variable income to help you stay afloat. It’s a good idea to work with your lowest or average income to help you ensure your main expenses are covered. This way, anything else you earn on top will be a bit of a bonus. Monitor your position carefully to help you adjust your earnings accordingly.
7. Find out what help is available
There are many resources available to help self-employed workers. These resources can provide financial aid in the form of grants and even loans, while there are different bodies out there to help you learn to manage your finances better.
If you’re unsure of anything, or you need some help with your finances, it’s a good idea to seek advice from experts to help you stay on the right track.
8. Be strict with your tax from the beginning
One of the things that people wish they knew before becoming self-employed is the issue of tax. Understanding your self-assessment and how to manage it can be difficult to grasp at first, but the sooner you learn, the better. HMRC has a lot of resources to help you out, or you may wish to seek help from an accountant,
Put money for your tax aside each month to make sure it’s covered. If there’s anything leftover when you file your self-assessment, you can use it as a nice little bonus for yourself!
Learning how to run your new venture can be difficult, but it will soon become normal for you. Keep your costs down at the beginning to help you settle into your new self-employed life and take steps to manage your finances properly. In no time at all, you’ll be a pro at handling your finances, all while being able to do what you love.