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So far in this series, we’ve talked about the time, money and stress we can cost ourselves by trying to do everything; why we should sometimes say no to work; and how bad management of our workload can overwhelm us. It must be time for a happier topic, right? OK. Let’s talk about payday…

Paydays

Yay! Someone just paid your invoice for £400. That’s handy, because you have a £120 energy bill about to direct debit its way out of your bank account and little Jodie’s school trip to France costs £200. You can spend the other £80 on whatever you want!

You can – but you really shouldn’t. You’re a freelancer now, and that means financially, you really are on your own.

 

Fail 4: Forgetting To Put Money Aside For Costs and Rainy Days

The list goes on. Having factored in your expenses, you must ensure that when you’re paid, a portion is put aside for paying these expenses. It’s not just available money; that energy bill direct debit will keep on spiriting money from your account every month and that laptop you’re using won’t last forever.

We never lick the feast and famine risk permanently. It’s only ever a job away. And of course, there’s always HMRC, waiting in the wings with a tax bill – and, if you haven’t filed your tax return correctly or on time, a fine.

 

How to Avoid Fail 4

 

Phew. Now I can rest easy, knowing that you’ll be prepared for the financially unexpected and that you’re running your freelance business like… well, a business.

Next time, we’ll take a look at why it’s not good to be a Bow with a Single String.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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