Smart Money Moves for Freelancers and Business Owners

Being your own boss is empowering but with that freedom comes added financial complexity. Unlike salaried employees, freelancers and entrepreneurs deal with irregular income, lack of employer-provided benefits and automatic deductions. This makes financial planning not just relevant, but crucial.

 Key Strategies to Stay Financially Secure and Future Ready:

1. Maintain Adequate Liquid Savings: To handle income fluctuations, delayed client payments or slow business periods, maintain a reserve of at least 6-12 months worth of essential expenses in your bank account.

2. Separate Business and Personal Finances: Use different bank accounts and UPI linked apps for business and personal use. This streamlines accounting, reduces confusion and simplifies tax filing.

3. Pay Yourself a Fixed “Salary”: Transfer a fixed amount each month from your business account to your personal account. It helps with budgeting discipline and gives you a more predictable income structure.

4. Plan for Taxes Proactively: Your earnings are gross income so set aside 20%-30% of your income for tax payments. Be aware of advance tax and GST payment deadlines and work closely with a qualified tax consultant.

5. Insure your Office and Team: Protect your workspace with fire insurance and provide health and personal accident coverage for your team members.

6. Seek Professional Support:

   • Chartered Accountant: To maintain proper business accounts and ensure tax compliance.

   • Financial Advisor: To align your savings and investments with your financial milestones and future aspirations.

7. Manage and Repay Debt Wisely: Keep debt within manageable limits and prioritise early repayment to stay financially flexible and stress-free.