Saving money for a rainy day

There are so many pros in my book to working from home and running my own business. It’s flexible, I can be a full time mum at the drop of a hat. I never miss any school events and I pick my own hours. I’m my own boss, I love networking and working with other small businesses but after 9 years I really don’t think I could work for someone else.  The word employee brings me out in a rash! But with anything there are pros and there are cons. For me finances is a major con.

Freelancing doesn’t mean FREE : 

If I had a penny for every time someone asked me to work for free or that popular currency “exposure” I would be rich! Sometimes there can be huge gaps between completing work and receiving payment. Freelancers dine on either steak or beans on toast! There is no in between!  When you run your own business you spend a lot of time on activities that don’t always easily generate money. ie accounting, social media, networking.

Save money for a rainy day :

money small business

When you are self employed it’s really important to have a contingency plan or a rainy day fund.  I soon decided after Charlie started school that I wanted to be able to enjoy the school holidays with the children doing fun stuff. This means I put money aside for the school holidays as I’m spending but not earning.

  • Keep things separate : I tend to just spend the money that is in my business bank account meaning I can have a lovely pile of cash building up in Paypal or People Per Hour for the holidays (or a dishwasher!).
  • Invest in shares : Shares can be a great additional income and savings revenue. They are designed to provide investors with both an annual income and long-term capital growth. Income is offered in the form of dividends, which is seen as a kind of reward for the shareholders, these are normally paid out twice a year.
  • Cash ISA : The annual ISA limit for the 2016/2017 tax year is £15,240.  As they are tax free it’s a great way to put money away for the future.  However there are so many available it’s worth checking you are getting the best deal.  Effectively if you are able to put enough away over the years you could happily live of the interest. Passive income at it’s best.
  • Premium Bonds : I remember owning some of these when I was younger. You buy £1 bonds the minimum being £100 and the maximum £50,000. The interest paid is decided via a monthly prize draw therefore the more bonds you own the better your chances of winning are.

Don’t put all your eggs in one basket : 

Investing money can be risky so ensure you spread the risk factor. Consider putting small pots of cash into various schemes instead of investing it all at once.  If you have any nifty tips or advice for putting money away for the future do share in the comments below.

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