We all know it can be gruelling to stay on track with our finances. That’s why at Icon Accounting, we want to provide you with all the tips and tricks to help you get the most out of your finances.
Here are 5 finance tips to keep in mind as an Independent Professional:
1. Project your earnings and price your rate
If you already have a contract secured for the next six months to a year it is easier to work out what you’ll make versus bills, savings and living expenses.
However, if you’re between roles or will be working on shorter contracts throughout the year, a good strategy is to assess what you must earn to live comfortably and then price out what you need to earn in the year to get there. It doesn’t have to be over a 12-month period, but whatever amount of time you feel makes sense.
2. Take note of all business expenses
Remember to keep tabs on your business expenses. For example, keep a record of the costs incurred when travelling for your business, like your mileage, tolls, etc. Even if you don’t have a different car for your business, you still need to document your business and personal use separate.
Other areas of your business to carefully monitor are your office expenses (such as office furniture, office supplies etc.) and business equipment and tools (business computer, business phone, etc.).
As a client of Icon Accounting, it couldn’t be easier to process a business expense claim. Simply upload the receipt to our app alongside a valid explanation for the use of your equipment to ensure the claim is processed as swiftly as possible.
3. Set Money Saving Goals
In general, it helps to keep an amount in mind and set it as a concrete goal. Such goals encourage you to develop healthy long-term money habits and increase your odds of hitting your benchmarks. Additionally, it can be helpful to set a timeline. Smaller goals within your overall target can keep you on track and leave you striving towards exceeding your goals.
Depending on the price value of your target, determine how much money you’ll need to set aside each month and commit it to habit. Using a money-saving calculator can help you to allocate your spending/saving. Although there are many methods of calculating your spending to saving ratio, a good rule of thumb is the 50/30/20 rule (50% on needs, 30% on wants and 20% on savings).
This breakdown is a good way of keeping your spending on track, but it is also realistic. We can all get carried away and say we will save 40% of our income, but in the real world, this isn’t always achievable. Unrealistic goals make it easier for us to get side-tracked and lose sight of goals completely.
4. Track your spending
Knowing where your money goes is an essential part of budgeting. If you don’t already, it’s time to start tracking your spending. There are various ways you can do this: use a spreadsheet, a notebook, or even download a budgeting app. From there, come up with an average figure for your spending and ensure that it is less than your earnings.
If it isn’t, you may need to introduce some lifestyle changes, and quickly!
5. Get professional advice
Being an Independent Professional doesn’t mean you have to do it alone. An accountant can make a considerable difference by helping you tackle part of your daily financial tasks while providing you with vital financial advice.
Accountants can guide you through your financial (tax) processes, and help you establish a system for your financial record keeping you can understand. At Icon Accounting, we also have our partners, Rockwell Financial who can assist with all your financial queries!
If you are a professional that is interested in hearing more about the benefits of working with a specialised accountant, please reach out to our team by emailing email@example.com or by calling 01-8077106.