Being a freelancer comes with a laundry list of business administrative duties. While you may have gotten into freelancing to focus on delivering your best work to clients, doing daily upkeep on your business can add a ton of extra pressure!
In order to build a successful career as a freelancer, you’ll need to create systems to be able to manage all of these tasks as efficiently as possible. This means focusing on the work that you do best and outsourcing tedious tasks that require valuable time and attention. Luckily, new technology makes it super easy to automate a lot of the time consuming tasks that come with being a solopreneur.
Managing the financial obligations that come with self-employment is an area where we as freelancers tend to get bogged down the most. Most of these responsibilities are things that the HR department would handle at a typical W-2 job – like tax withholding, setting up health insurance, and getting into some kind of retirement plan. It can be tricky to handle some of this stuff on your own. Luckily, companies like Honest Dollar and Freelancers Union have made it super easy for freelancers to find coverage and retirement plans that best fit their particular needs.
However, this is only half the battle. Making regular contributions to a retirement plan, covering monthly insurance premiums, and then remembering to set money aside for self-employment taxes can feel like a full time job all in itself. Throw in fluctuating income throughout the year and keeping up with your budget, juggling it all is, well, damn near impossible.
This leads to huge segments of the self-employed working without the benefits necessary to build a stable career. With 20% of freelancers completely uninsured and even more folks working without saving any money for retirement, it’s important to make sure you create a system that allows you to work with the coverage you need.
At Painless1099, we’ve found that automating the process of saving for and remitting payments for these financial obligations the best way to ensure that you stick to your budget. And we’re not alone! A recent white paper report released by Etsy shows that individuals are much more likely to save and fund their benefits when there is a system in place to allow them to “set it and forget it”.
Not only is this our motto at Painless1099, but we truly believe that this is the best way to manage your financial obligations and focus on the work that matters most. That’s why we’ve built a tool that automatically withholds a portion of your income for financial obligations.
In looking at which of these financial obligations is the most time consuming throughout the year, we realized saving for taxes is an on-going struggle for freelancers. With large portions of 1099 earners reporting spending upwards of 35 hours on taxes throughout the year, we decided to create a smart savings account that automatically withholds the percentage of your income that you need to save for taxes and transfers the rest – what’s safe to spend – directly to your personal checking account. It’s essentially the W-2 withholding but designed for your self-employment income.
Obviously taxes are only one piece of the puzzle. Being able to automate the process of saving for all of your financial obligations is where the true value is at. That’s why we’ve created a fixed withholding option. Once you know the percentage of your income that each of your obligations represents, you can set your own withholding rate to make sure you have enough saved to cover all of your expenses.
From there it’s super easy to link up other accounts to automatically pull these payments when they come due. Once you have everything set up, you can go back to work without the stress of keeping up with a handful of due dates each month.
There’s nothing easy about being a freelancer, but the reward is well worth it. That’s why it’s so important to make sure you’re always working as efficiently and have the benefits in place to maintain a stable career.
Ace Callwood is the co-founder and CEO of Painless1099, a smart banking solution that automatically withholds taxes for freelancers and independent contractors. As a former consultant, Aces help leverage the most powerful asset a company has – it’s people – through diversity, inclusion, and human engagement.
This is a post from Painless1099 – current sponsor of our SPARK program! Freelancers Union members get save 15% when you open an account with Painless1099. Learn more here.