Being prepared for life’s big events when you’re self-employed

Fluctuating finances can be a fact of life for those of us who work for ourselves. Whether you’re a startup or self-employed, the independent life can be full of surprises; some joyful, some not so good. While we’re absorbed in the business of business, it can be easy to forget that curve balls are just as likely to come from our private life.

The good news is, with a little bit of preparation, there are ways of dealing with these events which might just help soften the blow to your bank account.

Whether they’re happy, sad or exciting occasions or just plain old unexpected situations, here is some financial advice for dealing with life’s big events.

Be aware of what big events you might face

It sounds simple saying this, but there are some events in life that we’re all going to experience and some that we aren’t. It can help to have an early idea of what you’ll be dealing with down the line and therefore plan for all eventualities. Big events can include anything from going to university, buying a house, getting married, having a baby to getting a divorce, remarrying and even planning a funeral. Some are a choice and others are inevitable.

Create a financial plan

Cashflow planning isn’t just for your business. Sit down either by yourself or with your partner and create a spreadsheet detailing all of the expected earnings and expenditure for your household. Take the time to review it regularly and make any changes to the bits that need updating. Figure out exactly how much you can afford to save each month and make sure that’s put aside and never touched – except for when you need it for the big events.

Build a buffer fund

Savings are literally freedom when you work for yourself. You should aim to build up a buffer fund of a minimum six months income. You might never need to touch it, but knowing it’s there will enable you to make better choices in your business, to say ‘no’ to opportunities that you know aren’t right for you and to weather the inevitable down times. As they say: “build the roof when the sun is shining!” It will also leave you in a position to say ‘yes’ to what you want from life, when you want it.

Make savings

While you’re building up your buffer fund you may need to be very frugal. Review all of your household expenses and see where you can make savings. Shop around too if you have to deal with a big event or when utilities or insurances come up for renewal. Don’t get complacent and let your current policies auto-renew year after year and, equally, don’t fork out thousands of pounds for the first wedding photographer you speak to. Shop around, check comparison websites, get recommendations from friends and barter if you need to. You’ll get more bang for your buck in the long run.

Protect yourself

Whether it’s life insurance, a pension, financial protection, building insurance, pet insurance, holiday insurance or even writing a will, make sure you do everything possible in life to keep yourself protected. Health insurance is worth considering as well, and with our growing mental health epidemic, it is worth checking to see if mental health is covered. BetterHelp has some great information on this. To read it, click here.

The last thing you need is an unexpected bill for more than you can afford which could have been avoided had you had the right kind of cover. Unexpected healthcare costs, damage to your home, or your dog needing a tennis ball surgically removed from its stomach will always happen at the most inconvenient time financially; it’s just how things go. So, make sure you’re ready for them.

Financial planning is all about being clever with your money and making it go further. Don’t get caught out when you least expect it. Plan ahead and be ready for life’s trials, tribulations and lucky breaks. 

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