Managing Financial Health

Solopreneur Hub
1

Hello again,

I could really use some advice on managing financial health as a freelancer.
How do you balance paying yourself a salary while keeping business and personal finances separate? And what percentage of your earnings do you save for vacations and sick days? I’ve seen a few different best practice articles out there but curious to hear what’s worked best for you so you can sleep comfortably at night and rest assured that you’re building a healthy and sustainable setup for yourself.

Thanks for your insights! :pray:

2 Likes
2

What I have done in the past to balance business and personal finances and be able to pay my self a salary is having everything separate and under strict control with actual financial exercises jejeje.

  • Having separate accounts: for busines and personal finances helps a lot to have clear visibility and more control.
  • Setting a Salary: Decide on an affordable, consistent salary and transfer it regularly.
  • Expense Management: Pay business expenses from the business account and personal expenses from the personal account.
  • Bookkeeping: Keep detailed records and use accounting software for accuracy.

For saving for vacations and sick days is important to know what you want to achieve so you can estimate costs and plan timelines, after that you can:

  • Allocate Earnings: Save 5-10% for vacations and 3-5% for sick days.
  • Dedicated Accounts or sub accounts: use separate savings accounts for these funds.
  • Automate Savings: schedule regular transfers to these accounts.
4 Likes
3

Hi

Separate accounts for business and private use.

Have more than one bank accounts (in two separate banks) for your business. You must always have a backup so you can receive funds in case one account is temporarily on hold or bank X changes it’s compliance etc (personal experience).

I recommend a bank account for ongoing business expense and additional account for medium term savings / anything that is not month-to-month expense.
I personally keep two more accounts in addition to the month to month account.
Each account is dedicated to a specific goal / project and I transfer money to them every month (the are “savings” accounts so there is some interest involved at a very low risk).

Always always always have separate account, cards etc for personal and business use.
Do you absolute best to pay yourself first.

6 Likes