How to plan for your finances as a self employed/hustler/freelancer

If you are a self-employed individual in Singapore, there are several aspects of finances that you should pay close attention to. Managing your finances effectively is crucial for the success and sustainability of your self-employment/ hustling life~

Here are 6 important things to keep in mind:

  1. Know your taxes!
    Understand your tax responsibilities and ensure timely filing of your tax returns. Familiarize yourself with the applicable tax rates and deductions available for self-employed individuals.
    Tax Reliefs: https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/tax-reliefs-rebates-and-deductions/tax-reliefs
    Guides available on IRAS: https://www.iras.gov.sg/taxes/individual-income-tax/self-employed-and-partnerships/tax-obligations-by-industry-trade-or-profession 
  2. Keep it organised!
    Maintain accurate financial records to track your income and expenses. As you income /expenses go up, consider using accounting software or hiring a professional to assist you with bookkeeping tasks. It also gives you a better idea of how profitable you really are.
  3. Money moves! So take note of your budget & cash flow.
    Create a realistic budget to allocate your income and expenses effectively. Ensure you have sufficient funds for both personal and business needs. Cash is queen. Cashflow is king!
  4. Future Planning -Plan for your retirement.
    Unlike employees, self-employed individuals do not have mandatory Central Provident Fund (CPF) contributions. Therefore, it is crucial to plan and save for your retirement through alternative means, such as voluntary CPF contributions or other retirement savings vehicles to ensure streams of guaranteed income in retirement.
    Note: Self employed individuals are also required to make mandatory Medisave contribution. You can find out more here: https://www.cpf.gov.sg/member/growing-your-savings/cpf-contributions/saving-as-a-self-employed-person
  5. Protect yourself from life’s surprises with insurance.
    As self-employed, you do not enjoy employee insurance benefits. Take care of yourself, check out health insurance, critical illness insurance, and business insurance. Ensure that you have adequate coverage to protect yourself and your business from unexpected events.
    At different stages, different vehicles may work to your favor. In the early years, a term plan may be idea to keep premiums low. But if budget allows, a life plan may be a better solution in the long run.
  6. Stay in the know, continue learning.
    Stay updated with the latest financial regulations, tax changes, and government schemes that may benefit self-employed individuals. Attend workshops or seek professional advice (me) to level up your financial knowledge and skills.

By paying attention to these key financial aspects, you can better manage your finances as a self-employed 😉

 

 

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek unbiased financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

Lim Zhiwen Yvonne

I believe that “Worrying is not planning and Hope is not a good strategy”, and that the purpose of Financial Planning is to allow us to lead fulfilling lives while being financially wise.

As such, my role as a Certified Financial Planner CFP® is to help my clients build those sound financial strategies and design action plans that put them on track to their financial goals so that they can live the best possible life for themselves.

This is done via a systematic approach of ongoing cash flow management & asset allocation, as well as investment management, estate planning, and tax optimization.

I also ascertain that I stay up-to-date with industry trends and policies changes to ensure that my clients benefit from the latest strategies and opportunities available.

Over the years, I have developed a specialty in comprehensive financial planning for busy legal professionals & educators. I also particularly like assisting working mothers & young families to achieve their long term financial goals. Working with one of the largest financial advisory (FA) firm in Singapore also frees me from product pressures and allows me to only recommend solutions that suit my client’s needs. And client’s interest, is always the core of my FA business.

Being a wealth planner is my dream career and this is what I hope to do for a long time.

Other than financial planning & investment, I love to travel, read, bake and I am an adrenaline enthusiast. I am most looking forward to the day my children join me on my adventures.

 

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