Two-and-a-half years ago, I dove in to the pool of self-employment, and I haven't looked back. My marketing and PR company, Merit Media, supported us while my husband was in PA School, we worked on how to make sure I got paid regularly, even if my income wasn't all that regular, based on my billing and my client growth.
I've had some questions from friends starting their own companies about how we made the jump to full-time self-employment, and really there's one thing that set us up for success.
Starting A Business
When I began Merit Media, I went through all the proper channels to form an LLC, with the help of an accountant. Part of that was setting up a business bank account. This meant that my business funds didn't get mixed into our personal funds, which is really important for tax purposes and for everyday living.
Adam and I agreed upon an amount to put in to the business, and that money helped me buy a new computer, pay the fees to establish Merit Media, and then write myself a paycheck.
Yep, I paid myself first.
Setting Up Automatic Payments
With that money set aside to get us going, we established an automatic payment on the 15th and 30th of each month to emulate the paychecks I used to get auto-drafted to our bank account before I began Merit Media and worked for a non-profit.
Here's how we break it down:
I set 25% of my income aside for taxes, which I pay quarterly.
I pay myself 70% of Merit Media's income.
And the remaining 10% I use to put back in to my business and to account for months that might be a bit slower.
Why this works for us
We're big on budgeting at our house. And knowing the amount of money we'd be getting from my paycheck was a huge help in figuring out our budget.
Do you know someone who's self-employed or thinking about making the jump? I'd love for you to share this post with them! And if you've personally made the transition, or are working towards it, share in the comments!