Small business owners/Independent workers are in a unique financial position! Financial Life is different when you’re doing it on your own. I’ve always taken a “5 step” approach to handling it. Here’s a recap of my 5 steps and an article from CNBC.com that can help you keep up with the independents!
1. Think in Percentages: alot a percentage of your monthly income to three purposes: taxes, retirement and emergency savings. Set up an auto-savings!!
2. Think about Taxes: stash away 35 percent to 40 percent of everything you make for taxes.
3. Budget the Basics: figure out how much you must spend on housing, utilities, food and other expenses, and transfer this amount each month from your business checking to a personal checking account.
4. Build a flexibility fund: after you’ve taken out your percentages for taxes, retirement and emergency funds, give yourself your salary, and put the rest in a flexibility account.
5. Retirement Options: – Look into a SEP IRA! It’s a flexible and aggressive way to save.
Click on the article below for a great read on being your own boss, and the challenges and opportunities…