When I first took the plunge into self-employment in July, I had already set up a separate ING saving account for my blogging income. I also made sure it would be at or over $10,000 before I needed to start paying myself. Then my plan was to pay myself from that account just like I was employed regularly – it was my way of budgeting in self employment.
Self-Employment Pay So Far
My plan has worked out very well so far. I do pay myself $1650 from my Blogging Income account every 2 weeks. I then move $500 of that $1650 into our Tax account to go along with our monthly $400 contribution, so I will have more than enough to give the IRS quarterly. The trick has been how I should handle the rest of my monthly income.
So far I made about $7000 in July, $6800 in August, and am already at $5800 for September. My paychecks “only” have taken out $3300 each month (2 months a year will be about $5000). My expenses have been running between $500-$1000 a month. That means I have had about $2500 left at the end of the last 2 months that was just extra. My husband and I sat down and decided how we would break that up from here on out:
Monthly Extra in Blogging Income
We first move 35% of the extra into the Tax account.
The remaining part is broken down like our regular monthly extra:
|Investment Cash – Roth IRA’s and Stocks||35%|
|Crystal’s Fun Money||10%|
|Hubby’s Fun Money||10%|
This has worked out amazingly well. I also love seeing our savings and fun accounts grow so much quicker. It has allowed us a bit of lifestyle inflation when it comes to hobbies and vacations, but we don’t feel bad since we’ve inflated our savings too.
Other Big Blogging Expenses
We probably won’t have as much extra from here on out since I have been spending and will be spending a bit more here and there on blogging. My plan is to continue buying more sites, like I just did with Money in the 20s, and grow my income streams. That means I will be spending a bunch in the short-run to hopefully help myself out in the long-run. I also will be attending more blogging conferences, which will run about $1000-$1250 each. Lastly, I will have large expenses pop up like laptops once in a while since they don’t last forever. All of that will be taken out of my Blogging Income account before I even look to see if I have any monthly extra over my $10,000 of padding.
Are you self-employed? How do you deal with irregular pay?
FYI: I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year. I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home. If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!). Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!