Hey Jon--thanks for this. As Michelle said, unfortunately relatable! One thing I've found is that saving money became more of a challenge for me when I left the security of a W-2 job and started my own business. Now I have to save 20-30% of my income for taxes instead of having it automatically taken out of my paycheck! That's made it harder, psychologically anyway, to save for personal expenses or future needs. I'm trying to get better at all this stuff this year. What's your favorite budgeting software? Any other tips for small biz owners?
Hey Chris! So good to hear from you. Congrats on leaving your W2 and starting your own company. That's what I want to do when I grow up.
In terms of budgeting software, I'm a HUGE fan of YNAB. I've been using it for 10+ years and it's been my trusty companion through thick and thin.
I've also been doing some contractor work of late. Anytime I get paid for this type of work, I divert 35% of the income to a Rainy Day category called Tax Liability/Refund.
Since Rainy Day funds are separate and apart from other Category Groups in my budget, it's psychologically easy to allocate the remaining income to personal expenses and future needs. Check out this article for more on that: https://www.fallingtosystems.com/p/without-a-plan-your-budget-is-naive
That way, when next April comes around, I'll be ready to make the payment. This is also handy if you need to make quarterly tax payments since you're effectively saving as you go.
Thanks, Jon! I've tried using YNAB in the past but failed to create a lasting habit around it. I think I'm inspired to give it another go, though. I'll check out your other article, too!
Hey Jon--thanks for this. As Michelle said, unfortunately relatable! One thing I've found is that saving money became more of a challenge for me when I left the security of a W-2 job and started my own business. Now I have to save 20-30% of my income for taxes instead of having it automatically taken out of my paycheck! That's made it harder, psychologically anyway, to save for personal expenses or future needs. I'm trying to get better at all this stuff this year. What's your favorite budgeting software? Any other tips for small biz owners?
Hey Chris! So good to hear from you. Congrats on leaving your W2 and starting your own company. That's what I want to do when I grow up.
In terms of budgeting software, I'm a HUGE fan of YNAB. I've been using it for 10+ years and it's been my trusty companion through thick and thin.
I've also been doing some contractor work of late. Anytime I get paid for this type of work, I divert 35% of the income to a Rainy Day category called Tax Liability/Refund.
Since Rainy Day funds are separate and apart from other Category Groups in my budget, it's psychologically easy to allocate the remaining income to personal expenses and future needs. Check out this article for more on that: https://www.fallingtosystems.com/p/without-a-plan-your-budget-is-naive
That way, when next April comes around, I'll be ready to make the payment. This is also handy if you need to make quarterly tax payments since you're effectively saving as you go.
Thanks, Jon! I've tried using YNAB in the past but failed to create a lasting habit around it. I think I'm inspired to give it another go, though. I'll check out your other article, too!
Ah this is unfortunately very relatable! Thank you for sharing your experience and a plan for people looking to build a plan to save.
Thanks Michelle, I hope it helps people :)