Smoothing Out the Financial Highs & Lows of Being Self-Employed

Working for yourself is supposed to offer freedom and hopefully wealth. For some people this is certainly true, however for a lot of the ladies that I speak to, if they were honest, self-employment gives them insecurity and they would be much better off having a predictable steady income. The caveat to this sentence, is that this is how I felt in the early stages of building my business and I am so pleased that I went through that very painful phase. But it was a phase, it didn’t last for ever (touch wood).

A recent article in the FT adviser mentions that a number of women setting up on their own has hit an all-time high – 1.7m! But the worrying thing is that 35% are saving nothing for retirement according to Scottish Widows.

So here are my top tips on making working for yourself actually work for you:

1. Protect your income - Arrange an income protection policy with a good quality insurer. You are looking for contracts that have very few exclusions and insures you for your particular job rather than your ability to do any job.

2. Start with the bigger picture - What do you need to earn to pay your bills, have fun, go on holiday and to save for your future? Get your accountant or financial adviser to help you to work out what you need to be bringing in each month as revenue. Once you know this, how many sales/new clients do you need each month/week/day? Does your current pricing model help you to achieve your goals, or are you selling yourself short? If you put your prices up, could you do less work for more money?

3. Consider starting a pension - There’s always the excuse that “I’ll start my pension next year when I am earning more”. Don’t fall into the trap. But, also don’t forget the tax benefits of a pension too.

4. Analyse your targets with your actual sales/turnover and profit regularly - This is something that I do almost every day. It helps me know when I need to work harder or when I have earned some time off.

5. Speak to a mortgage adviser extra early!! - If you are employed you often need only 3 months’ worth of payslips to secure a mortgage. But for the self-employed talking to a mortgage expert a year, or more, before you need to re-mortgage/buy for the first time is essential as they will walk you through what you need to be doing now so that your accounts are sufficient to achieve your dreams.

In the comments section, I would love to hear what you do to be successful at being self-employed.

Lots of Love,

Miss Lolly xx

p.s. if you can’t afford a full term income protection policy ask your broker to talk you through the difference between the shorter pay out periods that are available. Something is better than nothing!!

Lisa Conway Hughes, is Miss Lolly, a mum of two, a Chartered Financial Adviser, a Fellow of the Personal Finance Society (PFS - the highest qualification a financial advisor can hold) and a member of MENSA. She is a financial expert, who writes, speaks, tweets and I blogs on all things money related. She's passionate about making financial education open to all and helping women get their finances under firm control.


Follow us

  • Twitter
  • Facebook
  • Instagram

© 2019 by De Startup Lab