Being your own boss offers freedom and flexibility, but it also means taking full responsibility for your financial future. When you don’t have an employer to handle your pension, sick pay, or other benefits, having a proactive financial plan can help offer long-term security and ease some of the stress that comes with being self-employed.
We’ve talked often on our social media channels about the myths around self-employment – like ‘I’ll never get a mortgage’ or ‘a Financial Advisor wouldn’t want me as a client’ – and we want to assure you that they just aren’t true. An Independent Financial Advisor can help you no matter what stage you are at in life, or what your income levels are.
Here are some of the things you can do to improve your financial future when you are your own boss:
Be Smart About Budgeting
Unlike a salaried employee, when you are self-employed, your income can fluctuate, making traditional budgeting a challenge. A key first step is to establish a consistent personal income strategy, perhaps by setting aside a percentage of each income payment. A good budget can help manage cash flow and provide a foundation for all other planning.
Plan for Retirement
One of the most critical areas of financial planning is retirement. Self-employed people don’t have an employer-matched pension, so setting up a personal pension, such as a SIPP (Self-Invested Personal Pension), is vital. Contributions benefit from tax relief from the government and can be a highly effective way to save, allowing you to build a substantial pot for your future.
Set up a Safety Net
Without sick pay, a period of illness or injury could severely impact your earnings. This is where protection policies come in. Products like Income Protection and Critical Illness Cover can provide a financial lifeline, ensuring you can still cover essential living costs and household bills if you’re unable to work.
Get a Mortgage that Suits Your Circumstances
For many self-employed individuals, a mortgage is a key goal. Lenders assess self-employed applicants differently, often requiring two to three years of certified accounts (SA302s/tax overviews) and a robust credit history. A professional mortgage broker who understands these nuances can be your partner throughout the process, helping you present a strong case and access specialist lenders.
Your hard work deserves a secure future. Take the first step today and get in touch for a meeting with one of D A Calder’s team of Independent Financial Advisors. We’re on your side and here to help you whenever you are ready.