Life can be a bit more stressful if you are self-employed. After all, it can often feel like you are opening yourself up to more risk. You don’t have the security of a long-term employment contract, nor do you have any corporate benefits. However, there are plenty of pros associated with being self-employed, as you are no doubt aware of. Plus, there are numerous ways for you to protect your financial future too. So, let’s take a look…
- Look for second streams of income – One of the best ways to protect your financial future is to look for other ways to make money. There are a number of ways you can do this. You can look for second income streams in the form of selling things online, taking surveys, and such like. Alternatively, and often more favourably, you can start investing your money. Investing in stocks and shares is something that a lot of self-employed people do. When doing this, you need to determine whether to opt for stocks and shares in big companies or small businesses. The likes of Bank of America stock can be tempting because such a business is reliable and sturdy, but if you want something a bit riskier that could yield bigger results, it can often pay to go for a small company. Of course, it all comes down to your attitude to risk.
- Get smart about tax – The next step is to ensure you are tax savvy. A lot of people are paying more money to the taxman than they need to simply because they haven’t educated themselves in tax-related matters. This does not mean that you should start using underhanded means to avert tax. Make sure everything is above board. Simply look for any tax breaks that you may be entitled to; for example, could you claim for the office you have in your house? Also, make sure you save for tax effectively. There are a number of tools and calculators online that can help you to budget.
- Consider protection for yourself and your loved ones – Your self-employed status will mean that you do not have access to some of the protections that come as a standard when working for a business. For example, you may not have access to sick pay and benefits like this. This is why it is a good idea to consider taking out insurance plans that will provide you and your family with the protection that is needed to fill this gap.
- Have a savings buffer – Last but not least, it is so important to have a savings buffer. You are probably well aware of the fact that your incomings can change from month to month. This is why you need to have a good amount of savings in place to cover your bills or your mortgage if work slows down or a client is late at paying a significant bill. This can often happen when you are self-employed, and so being prepared will ensure that such a situation does not end up being a disaster.