Dominique Broadway, personal finance expert, is a TSOS Chapel Hill speaker this fall. We are so excited to have her come and share all of her financial wisdom with us! In October she will be teaching two sessions: "Managing & Making More Money as an Entrepreneur" + "Investing & Retirement Planning for the Creative Entrepreneur." Today, she's sharing a little insight into one of her talks!
No one ever said entrepreneurship would be easy...however, you often hear how fulfilling it is! However, the feeling of fulfillment does not always pay the bills. Here are a few tips to ensure that your personal finances don’t suffer as you embark on your entrepreneurial journey.
Budgeting With Inconsistent to No Income
Creating a budget with consistent income can often to be difficult, so creating a budget with inconsistent income can be pretty challenging. As you begin your entrepreneurial endeavor, full or part-time, you should first determine how much it costs to keep you up and running each month. Example, your rent or mortgage, car note, utilities, food, loans, etc. This amount added up is your magic number. This magic number is the amount of income that you will need to bring in each month in order to for you stay alive and running. As you create your budget and determine how much you need to bring in each month, you can determine how much work or items you need to sell to meet your magic number. Using a free online program such as www.mint.com can allow you to obtain a complete view of your finances, maintain an online budget and keep track of your daily transactions and income. Another great program that practically forces you to save money is Digit.co.
Entrepreneurs and freelancers can get hit with a pretty hefty tax bill when they file their taxes. Full-time employees have their tax liabilities covered for them, since their employers will send a percentage of their paycheck to the IRS. Unfortunately, entrepreneurs and freelancers don't have this benefit and often have to handle their tax bills all on their own. To ensure that your not hit with a big tax bill, the best thing to do is pay your taxes quarterly. You can file Form-1040ES to estimate and pay your taxes quarterly. To pay your quarterly taxes online sign up for the Electronic Federal Tax Payment System.
You’re a Business Now, Act Like It!
One of the major perks of being an entrepreneur (besides being on your own schedule) is that you can "write-off" most of your expenses. Keeping track of the items you can "write-off" (deductible expenses or items that will reduce the amount of money that you actually pay taxes on) on a monthly basis instead of arriving to your tax preparers office with a big bag of receipts, can reduce the headache at tax-time greatly. Using one credit or debit card for your business expenses can also help to keep these purchases in one central location. Also, be sure to keep track of any mortgage or rent payments you have made throughout the year as those payments can be a deduction as well. Some of the other expenses you want to keep track of on a monthly basis are cell phone bills, web hosting fees, business meals, travel expenses, clothing expenses (if it’s related to your business), and business supplies to name a few.
Don't forget, enrollment opens TODAY at NOON! Mark your calendars, set your alarms...we can't wait to meet you!