5 Expenses to Consider When You Start Planning Your Work-At-Home Life | Guest Post
Everyone has big dreams!
Whether it’s disrupting the entertainment industry or traveling the world as a digital nomad, people generally want to make a name for themselves. Some people argue that as you age, reality hits and you’ll give up on your big dreams for a standard 9-to-5 job. However, the number of self-employed Americans says otherwise. Turbo notes that 33% of the American workforce is self-employed. This proves people are blocking out disbeliever noise and taking control of their income.
Although taking control of your income is appealing to many, possessing the confidence and skill-set to start your own business is intimidating. And rightly so. Securing your first client or group of customers is challenging. It takes patience and persistence to be a freelancer or business owner. In the beginning stages you’ll likely experience long hours, multiple rejections and little return. This limits a large number of people from taking a serious attempt at their dream job.
Ultimately, many people give up on their dreams because of money. Some believe that risking a steady revenue flow at a 9-to-5 job isn’t worth exploring the unknown.
If you’re a dreamer who sees the long-term rewards of self-employment, it’s important to stay informed on the expenses associated with reaching your career goals. Some of the costs to be aware of fall under creating a business entity, marketing, and equipment purchases. Furthermore, compiling savings for any unexpected circumstances, like in any other career.
Don’t let finances diminish your dreams! Educate yourself and make informed decisions. Let’s look at a few fees associated with startups or side hustles to get you started.
Because we live in a digital world, the internet will be your best friend. You need to market your business to people, and creating a website will probably be your first step. While there are free versions of website-building software, it’s wise to purchase a domain name. The cost associated with this is about $60. Purchasing a domain name can increase the number of people who take your business seriously, which can lead to a first client.
A common registration free for someone who’s self-employed is registering as a sole proprietorship. A sole proprietorship is the most basic business from which one can operate. One of the most common fees connected to this is filing for a trade name. This is especially important if you operate under a name different from your actual, legal name. Budget at least $100 for registration.
Insurance, everyone’s favorite topic! #jkjk While this expense tends to be more costly, the protection against unexpected damages and losses is valuable in the long run. A safe budget for insurance is $500. One easy way to allocate funds to insurance is by switching to a cheaper mobile phone. Identify what sacrifices you are willing to make in order to achieve your business goals.
Purchasing office equipment isn’t necessary for everyone. You might wait to buy office supplies until revenue cash flows are consistent, or work remotely in a group workspace. Equipment costs include anything from computers to office chairs. If you need to purchase a laptop and office chair, budget for about $1,300.
Now the best for last: taxes. You should anticipate a self-employment tax of 15.3% on top of income taxes. Tax rates do vary, so it’s important to do further research specific to what state you reside in. A starting point for taxes is $2,000. Allocate 25% of all earnings to budget for this expense.
Now that you know of five expenses to budget for, you’re more prepared to start chasing your dreams! Turbo details more statistics on the unexpected costs of self-employment and money saving hacks in this post.
Start educating yourself on the realities that lie ahead and don’t let finances discourage you!
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