Financial hurdles for the self employed include many bloggers and small business owners today.
While self-employment is an increasingly popular life choice, there is little clarity in terms of what help individuals can access when things go wrong; and little advice available on financial planning for the future.
Self Employed Financial Challenges
Few people who work for themselves can afford a top-notch accountant or financial planner. Problems they may face include falling ill or becoming a career for a sick relative.
With no statutory sick pay and no income protection insurance to cover the bills until they are better, many self-employed people simply have to work. They work when they are ill or risk a drop in income and, potentially, losing their home.
This is why we have seen a lot of self-employed people turn to the likes of Tri-merit.com to learn about tax themselves.
Retirement Provisions for Self-Employed
Moreover, making adequate provision for retirement is another challenge. Without the necessity to save through an employer with the auto-enrolment scheme, there is less motivation to consistently put money aside towards retirement.
Those who work for themselves are also likely to have difficulties accessing mortgage deals, or at least competitive ones. The self-employed individual is largely unprotected and vulnerable to life’s vagaries.
Consider Signing up with a PEO
Signing up with an online payroll application through a PEO (professional employer organization) will address much of this.
When the PEO becomes your employer, you gain access to a work-based pension as well as holiday pay, statutory sick pay, maternity, and parental leave.
You’ll also benefit from insurances to protect your income and the work you do for your clients.When the PEO becomes your employer, you gain access to a work-based pension as well as holiday pay, statutory sick pay, maternity, and parental leave. Click To Tweet
What About Lending When Self-Employed?
There are many people that are finding themselves in a position where they need to lend money for their business. With so many lenders offering loans nowadays, it can often be difficult to find the right one for you. Keeping that in mind, read on to discover the various factors you should consider to help you do so.
The first thing you need to do is make sure the lender is able to lend you the amount of money you require. However, it is vital to be realistic. The company isn’t merely going to hand over whatever amount you desire.
You don’t want to borrow more than you need to, as this is likely to put you in an even worse situation.With so many lenders offering loans nowadays, it can often be difficult to find the right one for you. #smallbusiness Click To Tweet
Repayment Terms for Self Employed
The next thing you need to do is assess the repayment terms. You must be certain that you can comfortably make the repayments outlined. Assess the interest you are going to have to pay to ensure you will have enough money to cover it.
In addition to this, you will need to discover how long you have to pay the loan back, and how the repayments will be made i.e. will they be monthly or quarterly?
You need to be certain the loan fits in with your situation, as everyone is different. If you carefully evaluate the amount you can borrow, as well as the amount you will be paying back and how you will make the repayments, you should be able to find the right loan for you.
In Conclusion of Financial Hurdles For The Self Employed
Don’t forget to set aside money for taxes if you have to pay self-employment taxes. If you worked for a company prior to being self-employed this takes some getting used to!
Be sure to price your rates for your services and products accordingly as you’ll have to pay taxes.
When negotiating rates as a freelancer, remember that you’re gonna need to save about 30 percent for self-employment taxes.
— Kaitlyn Arford (@kaitarford) September 2, 2020
Running your own business can make you wear many hats today. Of course, if you can hire others (like a financial adviser or an accountant) to do the jobs that will save you time. That time is time you can work your business to increase your income and your business for the future.
How are you managing your finances and taxes as a self-employed blogger or small business? I’d love to know more in the comments below!Be sure to price your rates for your services and products accordingly as you'll have to pay taxes. #InspireToThrive Click To Tweet