Financial planning for the self-employed in 5 steps
Financial planning is essential for the economic stability of any self-employed person, as their income can be irregular and is subject to taxation. and variable expenses. Here are five key aspects to take into account for a efficient financial management:
Budget and expense control
Keeping a detailed record of income and expenses provides insight into profitability of the business and make better decisions. A well-structured budget helps to to foresee economic needs, reduce unnecessary expenses and maintain a financial balance. There are many digital tools and applications for accounting that can make this task easier.
Tax savings
Self-employed persons must pay taxes such as VAT and personal income tax on a quarterly basis and yearly. To avoid unforeseen events, it is advisable to set aside a fixed percentage of the annual to have sufficient funds at the time of liquidation of tax obligations. tax obligations.
Emergency fund
Income instability makes a financial cushion essential covering at least three to six months of expenses. This fund makes it possible to meet periods of lower activity without compromising economic stability.
Retirement plan
The self-employed tend to receive lower pensions than salaried workers. According to Social Security data , the average pension for the self-employed in 2024 was 970 per month, compared to the €1,600 for salaried employees. It is therefore to supplement retirement with private plans, investments or long-term financial products. The earlier you start saving, the better will be the future benefits.
Income diversification
Relying on a single source of income can be risky. Exploring new business opportunities, offering additional services or investing in alternative projects can bring stability and growth.
Proper financial planning allows the self-employed to deal with unforeseen events, improve their quality of life and ensure a solid financial future. improve their quality of life and ensure a sound financial future.
