According to statistics, more and more people are ditching the traditional 9-to-5 jobs to work for themselves. An estimated 4.8 million people in the United Kingdom have actually reportedly switched to a freelance career or started their own business to be their own boss.
While going this route has its perks, becoming self-employed also comes with many disadvantages. For example, a shocking 62% of this demographic don’t have savings for retirement while a worrying 28% say they don’t save period. Also concerning is that self-employed women remain more vulnerable financially compared to their male counterparts.
Thus, self-employed people should be more mindful about their financial security for the sake of their future. Here are some simple yet impactful moves you can start doing now.
Create a Business Bank Account
If you haven’t yet, open a separate business account for your work needs. This would help you split your work and personal expenses better. What more, you’ll also have an easier time doing your taxes come tax season. Meanwhile, experts from Good Housekeeping magazine also recommend people to research for the best bank account they can get before opening a business account.
Invest Your Savings Wisely
Women, while they tend to be great at saving, usually keep their money in cash accounts and end up getting not-so-good returns. Instead of keeping savings stagnant, consider putting them into long-term investments such as stocks.
Doing so, will lead to a better return on investment in the long run. Mind the keyword ‘long-term’ though. Since the stock market is volatile, your investment’s value can go up and down in the short-term.
Save Up For A Pension
One of the biggest disadvantages of being self-employed is that you don’t have the help of an employer to make pension contributions for you. But don’t let this demotivate you from regularly setting money aside for your retirement fund. Remember that you still have the benefit of a helpful 20% tax relief for any money you put into a pension. In the end, getting a private pension plan would still be worth it.
Seek For Help
Don’t be afraid to seek help whenever you run into problems in managing your business or work finances. You can seek advice from various reputable websites dedicated to finance or freelancing and read about what other people did when faced with a situation you’re currently dealing with.
Consider Hiring An Accountant
Filing your annual tax return as a self-employed individual can be more complicated than if you were regularly employed. If you’re still unsure about the process, don’t hesitate to hire an accountant to walk you through the proper way to file your taxes.
