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Ideas to help you manage your income when working for yourself

If you choose to become a self-employed independent support worker, it means that your income may not be consistent from month to month. You’ll feel more confident and prepared to negotiate rates with new clients when you manage your money well. Here are some easy steps to help you manage your income when working for yourself.
Step 1: Know your expenses
As an independent worker, you may not have many business expenses. But you will need to include costs for things like training courses, conferences & seminars, travel costs (public transport, taxis, parking, petrol, registration, insurance etc), computer costs, telephone costs, subscriptions, books and more.  Note that these expenses are all tax deductible!
Keeping track of your expenses will mean that you are ready to claim all the deductions you are owed at the end of the year. Check out MoneySmart’s online budget planner for more information.
Step 2: Understand what income you need
If you don’t know what you need to cover your expenses, you will not know how much you will need to charge your clients to cover your costs. Often, new workers starting out may under-price their services because they ‘need the work’. Read more at How to set your rates on Mable.
Step 3 – Set aside money for tax
A common pitfall for the newly self-employed is failing to set aside money to pay for income tax. Unless you plan ahead for tax, it can be difficult to pay your annual tax bills. We’ve joined forces with award-winning tax and accounting firm YOUtax to build the Mable Tax Benefits Program for independent support workers. The Program offers free resources and exclusive YOUtax service discounts. You can learn more about the Mable Tax Benefits Program here.
Step 4 – Set aside money for those ‘rainy days’
As a self-employed person, you will not get paid when you are sick. So putting aside money for times when you might be unable to work makes sense. There are also those times when you may be ‘in between’ jobs when a client no longer requires support or their family takes over caring responsibilities for a time. A ‘rainy day’ savings account can keep you afloat until you secure a new client.
Step 5 – Don’t forget to plan for retirement
As a self-employed contractor, you need to consider superannuation to ensure you have enough money to live on when you retire. Most self-employed people can claim a full deduction for contributions they make to their super until they turn 75.
You may also be eligible for the super co-contribution payment, designed to help low-to-middle-income earners save for retirement. If you’re eligible and make personal super contributions, the government will match your contribution up to certain limits, unless you have claimed your contribution as a tax deduction. For more information, visit the ATO website.
Step 6 – Develop great money habits
Great habits are required when it comes to managing your money, especially if your income varies from week to week. Develop a money habit that includes updating your cash book weekly with expenses, and scheduling a quarterly check-in with your financial advisor.
Top tip!
Join our Facebook Mable Community of Independent Workers group to share and learn ideas with your colleagues on the platform and see what creative initiatives others are taking to build their network of clients.