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The day I became self-employed was the same day my relationship with money changed forever.
I’ll be honest, I’ve never been massively in tune with my finances. Sure, I have savings and I paid off my credit card a few years ago, but I’ve always opted for using my money towards life’s great experiences rather than piling it up to sit there in a bank account (travel and gourmet dinners are what make life worth living, amiright?).
But being self-employed means you think about money constantly. The comfort of a regular pay cheque is replaced by the realization that your income is entirely dependent on you and your hustle. I’ve learned a lot of truths about money since ditching the 9-to-5 life four years ago, many of which have been stressful, expensive and have sometimes led me to rethink my decision to work for myself.
The biggest money truth I’ve learned? That no one is looking out for my future except me. I don’t have a pension to rely on, I don’t have company benefits in case I get sick, I don’t have a cushy bonus coming in every holiday season – if I want to maintain the lifestyle I have now and set myself up for the future, that’s all on ME.
And let me tell ya, friends…. that’s a pretty scary truth for someone who is 34 and has no money saved for retirement.
It wasn’t the lack of money or shopaholic tendencies that kept me from investing in my future – it was lack of confidence. I had no idea where to begin. I went to school for English Lit and studied Chaucer – no one was teaching me about RRSPs or stocks or mutual funds. The idea of going into a bank and sitting across from an old dude thinking I was another dumb Millennial didn’t appeal to me. I found it all confusing and intimidating and so, I just ignored it.
But a few years ago I saw an ad for Wealthsimple online. It spoke to me like a peer, like a human, not like some crusty old man yelling at me to get my act together all the way up in his ivory tower.
It was the first time I was actually intrigued about investing.
I started to do more research into Wealthsimple (whose tagline is ‘Investing on Autopilot’), watching their badass video campaigns and devouring their money diaries. I read stories I could relate to, that made me feel okay about my own financial situation – even made me feel more confident. Very quickly, I realized that discussing money and my future didn’t need to seem so scary.
And so I pushed the fear aside and did the one thing I could to set myself up for future success – I just started.
I opened an account with Wealthsimple and now with each pay that comes in, I put a percentage into retirement savings. I also started to invest – not a lot, but a little. As my business grows (and as I learn more about investing and grow more confident in my knowledge), I can start to contribute more.
But the main thing…. is that I started.
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Investing in my future is just one of the many money truths I’ve realized since becoming self-employed. Keep reading for four more big financial lessons I’ve learned, and how I pivoted and set myself up for success in my life and business. How many can you relate to?
ONE MONTH YOU’RE RICH, THE NEXT THREE MONTHS YOU’RE SCRAPING PENNIES OFF THE FLOOR.
The first time I got a big payment from a client, I treated myself – it was a fat lump sum and I figured it wouldn’t hurt to spend most of it and start saving when my next invoice was paid. The following three months, though? Nothin’. Nada. Zip. I had no money coming in, I was chasing clients for payments and asking my then boyfriend to spot me money for rent.
I learned pretty quickly that the days of bi-weekly direct deposits were gone, that knowing exactly how much money was coming in (and when) was a thing of the past. Now that I was self-employed, I needed to prepare for the slow months by being smart with my money in the busy months.
How I Set Myself Up For Success:
- I created a business savings retainer for the slow months so I could continue to pay bills, contractors, etc. I contribute to it with every payment that comes in, because I need my business to keep running even if I haven’t been paid in three months.
- I also created a personal emergency savings account to cover three months of living expenses – this way, I wasn’t stressed about money and taking on projects that weren’t a brand fit simply to pay the bills (Wealthsimple has a Smart Savings account that is perfect for this – better than the big banks with 2% interest, unlimited transactions and no minimum account size)
- I lowered the limit on my credit card & really focused on living within my means (tough at first, but I currently live with no debt and it helps me to make smarter decisions about my business)
TAX SEASON ISN’T JUST ONE MONTH. IT’S ALL. DAMN. YEAR.
Anyone who is self-employed knows that doing your taxes is an absolute nightmare – tracking every purchase and invoice and payment the whole year, living under piles of receipts, and making sure you’re putting aside 30% of your income to cover tax time, plus that 13% HST (don’t even get me started on the constant fear of getting audited).
Okay, now here’s where your girl gets vulnerable. I dealt with some REAL tax shit this year. To make a long (and horrific) story short, I discovered my tax preparer hadn’t been filing my HST for the past five years (I’ll leave space here for your gasps, shock and jaw-drops). When I found this out, my head went into a spiral of ‘what right do I have to run a business?’ to ‘I’m an idiot and I’m so embarrassed!’ to ‘Omg, I’m gonna be on the CRA hitlist for life.’
But after hours of tears, I pulled myself together and made a plan. I confided in a friend who was business-savvy and connected me to her accountant, and I looked on the bright side that I wouldn’t have to go into debt because I had a nest egg of savings and no credit card payments to make or outstanding loans. It was a hot mess, but I learned my lesson, pivoted, and made sure that I would NEVER make the same mistake again.
How I Set Myself Up For Success:
- I found a great accountant who used to be an auditor. He’s much more expensive, but investing in quality up front will save my ass in the long run.
- I enrolled in Sole Prop School, an e-course for solopreneurs run by New School of Finance – even though I have a fancy new accountant, I wanted to educate myself on how to properly set up my own business and understand taxes in Canada.
- I got a new bank account that allowed me to create folders to organize my money (kinda like a Pinterest board) – I can separate my taxes from my other savings.
- I started to use Wave Accounting to organize my invoices, receipts and incoming payments digitally (goodbye shoebox of receipts!)
TIME IS MONEY…BUT PEOPLE ARE STILL GOING TO ASK YOU TO WORK FOR FREE.
A weird thing happens when you become self-employed – people try to get work from you for free (maybe it’s because you set your own rates?). As a blogger, I found it coming from all sides – brands wanting me to create free content around their products, and bloggers reaching out asking for help in exchange for a coffee. When I was first starting out, I said ‘yes’ to a lot of these requests because I didn’t want to come off aggressive or greedy – I wanted to make people happy and build good relationships.
But after awhile, I realized I was actually doing the opposite. As a business owner, I wasn’t valuing the most important thing – my time. I was burning out because I was giving so much of myself with little in return. I quickly shifted gears and reminded myself that this was my business now…. and I needed to treat it as such.
How I Set Myself Up For Success:
- I determined what my hourly rate was and aligned that with any time I was spending performing work for other people (basically, my time + skill equals money)
- I built up my confidence as a negotiator (and as a female business owner), reminding myself that I’m not being greedy or aggressive, but it’s just business – if I don’t believe in my own worth, no one else will either
- I started to charge a consulting fee for anyone wanting to meet for a coffee to discuss their blog and offer advice and solutions
PUTTING ALL OF YOUR FISH IN ONE INCOME STREAM ISN’T A GREAT IDEA.
You’ve heard the saying – “Don’t put all of your eggs in one basket”. Well, for bloggers and content creators, I like to say “Don’t put your whole brand into one Instagram basket.” I learned pretty quickly how unstable this industry is, from changing algorithms that impact your reach to new bloggers popping up every day competing for brand attention and their marketing dollars. To put all of your trust into making income through brand partnerships isn’t sustainable – you have little control over the stream of money coming in, and your popularity won’t last forever, unfortunately. It’s important to set up a number of income streams so that if one dries up, you’re not left broke and climbing into credit.
How I Set Myself Up For Success:
- I started pitching freelance writing + photography projects more frequently.
- I continued to consult with bloggers and take on more speaking engagements at conferences and events (which relied on my skill, not my social media reach).
- I launched The Renegade Sessions (which is a workshop series for female business owners) and have started building an e-course for bloggers to create a passive income stream.
The thing is, money will always be something I struggle with as a self-employed woman. I’ve made mistakes (some very expensive ones) and I’ll continue to make mistakes. But I wouldn’t trade my renegade status for the world – and neither should you.
Lack of confidence in your financial knowledge or money worries should never hold you back from building a life you want. The information is out there, whether it’s courses like Sole Prop School or all the easy-to-digest content on Wealthsimple’s site. It’s all about learning from your mistakes, pivoting, and finding the tools to set yourself up for future success…
…and a good accountant.
This post was done in partnership with Wealthsimple,
however all words, opinions and money moves are my own.
If you’d like to know more about Wealthsimple and take advantage of the awesome $10k managed free EXCLUSIVELY for This Renegade Love readers, check out our fancy TRL page.