If you are self-employed, it can be empowering to take control of your company’s finances; however, it can also be difficult to keep track of everything you spend. Here we share our top tips on how you might be able to cut costs and save money if you are self-employed.
- Manage your credit
Funding your business if you are self-employed can be tricky, and you may be looking at different options. Credit cards can be a good way of accessing funds and paying for company purchases, especially if you are looking for money in the short term. However, if irresponsibly used, they could end up costing you far more in the future.
Credit cards can be a great option for your business, but you should research the best options available and opt for a purpose-built credit card rather than a personal credit card. You should also consider business loans and compare rates as these could turn out to be cheaper in the long run.
- Look into deductible expenses
One of the biggest mistakes that you can make if you are self-employed is not knowing which of your expenses are claimable. It can be tempting to leave all of your deductions to the end of the year, but it can be extremely stressful come tax season and can mean that you miss out on certain deductions. As you go through the year, you should always be thinking about what deductions you could be eligible for.
If you are running your own business, you should keep a detailed record of everything you are spending your money on and consider which of these expenses could be allowable expenses that you could claim for.
- Make use of your Personal Savings Allowance
Depending on your personal financial situation, you may be in a position to put a certain amount of money into a savings account and could be eligible for tax allowances on any interest you receive. You could have a Personal Savings Allowance, the value of which will vary depending on which tax bracket you fall into. It is worth looking into this as you may be entitled to up to £1,000 of tax-free interest.
- Shop around for the best offers
If you are self-employed, you should be as savvy as possible and shop around for the best available plans, be it your company insurance, loan provider, or phone and internet plan. Research can be tiring and time-consuming, but it is sure to save you a lot of money in the long term and is always worth doing.
For example, if you are self-employed, it might be an easy option to use the same phone and internet plan for business and personal use. However, you could be losing money by not using the best deal available. When going into business for yourself, consider different packages and prices based on your priorities and needs taking into consideration elements such as call or data allowance.
As part of this, make sure you are not wasting money on any goods or services you are no longer using. Any subscriptions that you no longer use are burning a hole in your wallet. This includes any direct debits that may still be in use. Taking time to check your statements and stop any unnecessary payments will help you save money.
Author Bio: Daniel Tannenbaum
Daniel is a London-based financial consultant who has worked in fintech for over 10 years.