10 keys to a successful independent career

Many self-employed workers immerse themselves in the business without special preparation. Some are swimming, others are sinking.

Blind immersion might work, but there is a possibility. Striking the following things before the jump will help you stay afloat in your new venture.

1. Thick emergency fund

They are self-employed and self-employed some of the happiest workers in America. The key to enjoying this freedom is a solid emergency fund. Without the money to burden you when work is infrequent – as it will be occasionally – you can forget about your independent dreams.

Some financial advisors suggest that the emergency fund cover you for six months. But consider more. It can take 60 to 90 days or more to complete some tasks, gain new customers, or get some customers to pay you.

Tip: Do you dream of becoming a self-employed worker and are wondering how to get started? Read “21 hobbies you can turn into a business«For ideas.

2. IRA or Solo 401 (k)

When you leave the world of automated 401 (k) contributions and employer matching, there is a temptation to stop saving for retirement “just for a while”. Don’t go there. Continue to save by financing an individual pension account (IRA) or a Solo 401 (k) plan.

Tip: The only retirement guide you will ever need explains how to start or update retirement planning.

3. Budget

Dealing with a variable income is one of the biggest challenges of working independently. Your payments may arrive occasionally with long droughts in between. So you will need a budget structure to help you plan confidently. Some of us in Money Talks News use and recommend it YNAB (Need a budget) for planning and spending.

Tips:

• Calculate the minimum monthly income you can expect and base your budget on that.
• Identify all costs and make them as predictable as possible.
• Avoid spending any excess income. Instead, keep it as a safeguard against empty times and surprises.
• Adjust your monthly income as your earnings grow.

4. Calm nerves

Self-employment is great for all the reasons you suspect: flexibility, freedom from office politics, less travel to work, and more job satisfaction are just a few. But the uncertainty never stops.

Before you leave a good job, check your well-being and make sure you can accept the uncertainty.

5. Backups for your backups

Redundant systems are key for self-employed workers. Don’t allow yourself to miss a customer deadline due to a computer error. Have a reliable second computer to back up.

It’s not necessarily a brand new cutting-edge system, but something that’s good enough to reliably get you online and back to work.

Also, back up your work to your computer constantly and automatically. Furthermore safe copying both to a cloud storage system (such as Backblaze) and to an external drive will provide peace of mind. This sounds like an exaggeration until you turn to one of your backups and find that it doesn’t work as expected.

6. A little computer knowledge

Nothing encourages you to appreciate your last employer’s IT department as if you are in a stream without technical support.

It doesn’t hurt to be a computer genius, but it doesn’t have to be. When your device or software stops working, take a deep breath, think, check your connections, and find solutions over the Internet.

7. Health insurance

If you are moving away from a health insurance plan paid for by the company, find out in detail what your insurance will replace after you extend your COBRA insurance coverage.

Learn in advance how much your premiums cost, how much they could grow, and how you will pay for uncovered medical expenses.

8. A tax advisor who understands independent living

You will need a tax advisor with experience working with self-employed workers. Even if you’re happy with your tax, consider professional help for the first year to understand the requirements, get a real start with bookkeeping, and have help weighing whether to get involved.

One thing you will miss is your old employer’s contributions to your Social Security and Medicare taxes. Now that you are both an employer and an employee, you have to pay everything. According to the tax service, the total self – employment tax rate is 15.3%. Here is the breakdown:

• • • The social security tax (for old-age, disability and family insurance) is 12.4%.
    • Your Medicare contribution (hospital insurance) is 2.9%.

Now you also need to submit quarterly tax payments and master the rules for assessing what it should be like. An accountant also helps here.

9. Entertainment plan

Many self-employed workers become exhausted because they neglect everything but work. Don’t fall for the topic. The more tired you are, the more you turn the wheels.

Work discipline includes preparing and keeping a plan for moving away from the table, socializing, and exercising regularly.

10. Child protection

Even with older children, you’ll want to provide childcare if you have to pull all night to meet a deadline, or fly out of town unexpectedly.

At the very least, arrange with a neighborhood teenager or day care provider to cover you for a few hours a day or during important phone appointments.

Also, make backups if your regular child care provider has their own crisis.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click the links in our stories.

As an article