• Bryan Zavestoski, over 4 years ago

    Warning, novel incoming...

    This is definitely something I've been thinking about lately. It's not perfect, but here's my system:

    • Keep completely separate business and personal checking, savings, and credit cards
    • All deductible business expenses go on my business credit card. All non-deductible business expenses go on my personal credit card.
    • All expenses are auto-imported into my personal finance app, so I have a good idea of what I'm spending every month
    • Automatically put 30% into a business savings account for taxes (varies by state/country)
    • Keep ~20% in my business checking depending on how far subscriptions and other expenses are budgeted out
    • Transfer the rest to my personal account (this then gets allocated to personal monthly expenses, paying off student loans, saving for travel, etc. )
    • I like having ~2 months of living expenses in an emergency fund, but this greatly depends on your income, expenses, risk tolerance, etc.

    I don't currently pay my self a monthly or bi-weekly paycheck, but it's something that is probably a good idea.

    Client-wise, I'm more concerned about the initial scope/budget rather than steady ongoing work. If you find good clients and do good work, they will likely turn into longer-term projects anyway. Potentially trading higher income work for more steady work means you lose the time you could dedicate to more profitable projects or working on the business.

    My biggest challenge right now is figuring out when to invest in my business (software, hiring a CPA, courses, etc.) vs. putting towards personal debt vs. building a larger emergency fund, etc. I have a clear picture of my personal and business finances, but I'm not sure of the best way they should interact.

    The part where we talk about software, apps, etc.:

    I'm using YNAB to track my personal and business income/expenses. It took a little while to get set up, but it now gives me a pretty good picture of my overall finances.

    and.co is what I use for invoicing and business expense tracking. This is what I reference when doing my taxes even though YNAB is easier to use day-to-day.

    0 points