"Those who make the leap into solopreneurship are often struck by all the little things they took for granted as salaried employees. Things like having health benefits, taxes and retirement savings deducted from their earnings, knowing exactly when the next injection of cash is coming, or what they'll make next month. Even monthly billing cycles for things like rent, student loans, and car payments are based on the assumption of predictable monthly earnings."
"Most don't ditch the corporate life because they're really good at finance and tax planning-unless, of course, they're venturing off to become an independent accounting professional. For most, having to suddenly act as your own finance department is not just jarring, but also distracting from the countless other challenges that come with establishing an independent business. "Solopreneurs have so much on their plate already; adding money stress is siphoning off creativity that would be much better spent making their businesses successful," says Ashley Lapato, personal finance educator for budgeting software provider YNAB."
Fluctuating income requires intentional adjustment because many systems assume predictable pay. Solopreneurs lose employer-provided benefits and automatic deductions for taxes and retirement, and lose certainty about timing and size of future income. Regular monthly obligations like rent, loan, and car payments assume steady monthly earnings. Many new independents lack finance and tax planning skills and must suddenly manage their own financial operations, which can be disruptive. Money stress reduces creative energy and business effectiveness. The initial practical step is to calculate the minimum monthly cash required to sustain lifestyle, including mortgage, debt minimums, car payment, groceries, and to account for irregular expenses.
Read at Fast Company
Unable to calculate read time
Collection
[
|
...
]