There are a lot of benefits that come with self-employment, but one significant downside is that you’re 100% responsible for managing your finances. No employer is making sure your taxes get paid or that you’re saving for retirement — it’s all on you.
Fortunately, as the number of people working side gigs or starting businesses grows, so have the available resources. There are tons of financial tools to help you plan for taxes, save for retirement, and manage cash flow in your business.
9 financial tools and resources for business owners
Here are the nine best financial tools and resources for self-employed individuals:
1. Catch
As a small business owner, you’re not only responsible for paying your own taxes annually, but you have to do it quarterly as well. If you expect to owe more than $1,000 in taxes, you’re required to make quarterly payments to the IRS.
Here are the payment due dates for 2022:
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April 18 — First payment due
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June 15 — Second payment due
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September 15 — Third payment due
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January 17 — Fourth payment due
Mailing checks to the IRS every quarter can be tedious, which is why Catch is a great resource to try. You can connect Catch to your bank account and automatically save a percentage of each payment you receive.
That way, you’re not caught off guard when your quarterly payment is due. And you can use Catch to easily submit your quarterly payment to the IRS.
2. Wave
Once you’re self-employed, you’re going to need a way to send invoices and manage cash flow in your business. And if you ever want to apply for a small business loan, you’ll need to be able to create financial statements.
Fortunately, you can use Wave to do all of the above. Wave is accounting software, and it’s completely free to use. It’s a great option for anyone looking for an inexpensive way to manage their business finances.
The software is fairly intuitive and easy to use, even if you have limited financial experience. You can connect the software to your bank account to track and reconcile your transactions.
You can send unlimited invoices and set up automatic payment reminders. And you can accept credit card payments and bank payments using Wave Payments.
Wave is a good option for anyone looking for no-frills accounting software. However, there aren’t any higher-tier options, so it may not be the best fit for businesses that need additional functionality.
3. Business checking account
Even if your full-time job is your primary source of income and you have a side gig, it’s essential to separate your business and personal finances. Separating your finances will help you simplify your cash flow and make it easier for yourself come tax season.
And if you want to set up an LLC or apply for a business loan, you’ll need a business checking account to do it. You can easily set up a business bank account at a nearby bank.
But many financial experts recommend setting up multiple bank accounts for your business. For instance, it could be a good idea to set up a savings account to save money for future business investments.
4. Business credit card
If you’re self-employed, you don’t necessarily need a credit card for your business. But if you decide to use one, you should apply for a dedicated business credit card. Business credit cards usually offer better rewards than personal credit cards, like generous welcome bonuses or points.
And many cards come with business-related perks, like the ability to provide free cards to employees or access higher credit limits. And using a business credit card will help you begin establishing credit for your business.
5. Cushion
One of the biggest challenges for freelancers is managing their projects and income. One month, you may be booked solid with work and barely have time to do anything else.
But the next month, you could find yourself with very little work and stressing about how you’ll pay your bills. If this cycle sounds familiar, Cushion can help — it’s a project management app designed to give freelancers insight into their workload and availability.
Cushion visualizes your schedule for the entire year, allowing you to plan your workload for the month accordingly. By giving you a bird’s eye view of your year, it saves you from committing to too many projects at once.
You can also use Cushion to manage insights about each of your clients. This information can help you identify whether or not you want to continue working with specific clients.
6. Square
Square is an excellent option for small business owners that need a payment processor. And if you frequently accept payments on the go, you can also use the card reader.
Square is one of the most popular payment processors, thanks to its simple, flat-rate credit card processing fees. And it’s also a good choice for service-based businesses since you can use the software to send invoices and accept payments.
Square works well for businesses in any industry and integrates with most accounting software. You can also provide discounts and print receipts for customers.
7. AND CO
AND CO is another app designed specifically for helping freelancers manage projects. The software allows you to create proposals and contracts for potential clients so you have the details ironed out before the project begins.
Once the client has agreed to the terms, you can request an upfront deposit. And you can use the app to send invoices and receive payments. AND CO also comes with time tracking capabilities, recurring billing, and some accounting features.
Best of all, when you send an email through AND CO, you’ll receive a notification once your client has viewed the email. This will help you determine how and when you should follow up with that person.
8. Personal Capital
When you’re self-employed, you can’t take advantage of an employer-sponsored retirement plan. But Personal Capital is a good option if you’re looking for ways to start saving for retirement.
The app is an all-in-one portal that lets you keep track of your banking, budgeting, and retirement accounts. You’ll start by connecting your existing investment accounts to the app and let the retirement planner evaluate it.
This feature will evaluate your current risks and identify opportunities to maximize your financial rewards. By using Personal Capital, you’ll know you’re covered financially for the future.
9. Income insurance
Have you ever considered what you would do if an injury or illness prevented you from working? Having to take a week or two off work may be doable, but what if you were forced to take months off work? For most business owners and freelancers, this would mean a total loss of income during that time.
That’s why income insurance is vital for anyone who’s self-employed since you don’t have paid time off or other benefits to fall back on. Income insurance can provide a financial safety net to help you get through.
The bottom line
Whether you’re freelancing on the side or you’ve been in business for years, it’s important to have the right tools and resources available. The ability to send invoices, track your income, and manage your finances will set you apart as a professional.
Staying on top of your quarterly taxes will make life easier come tax season. And signing up for income insurance can protect your business from the unexpected.
For instance, if you sign up for income insurance through Asteya, you’ll receive a one-time payment of $500,000 if you’re permanently disabled. If you’re interested in learning more, you can sign up online and receive an instant quote today.
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