Do you earn enough?

[longdogs]

Just paid my tax bill and national insurance for last year and it has more or less cleaned me out. I admit that I do not put money aside for these bills as I never seem to earn enough to do so.

I find that what with all the costs of being self employed: tax, accountant, fuel, car maintenance, materials etc etc, I am probably worse off than someone who sits at home all day doing nothing.

I feel that I must be doing something fundamentally wrong, even though I always charge what I consider to be fair price for the job.

Is everyone else finding it really hard at the moment or is it just me?

I like having a good work ethic but should I just get on the end of that dole queue?

 

[securespark]

I too had a similar issue when I was S/E.

Look at your books. If (like I had) you have an accounting ledger with "IN" payments on one side and "OUT" payments on the other, you should be able to tot up the various totals in each column and see where your money has gone.

Rather like household expenditure, this will help you identify where your money goes and what steps you can take to rectify matters.

 

[nickjb]

I agree with securespark. It's very easy to work hard, earn money and spend money without giving it much thought. It's well worth taking a bit of time to go through the figures regularly and do a bit more planning. That said, the tax bill still comes as a surprise to me every year. I keep checking my bank balance and thinking I'm doing OK until I remember that most of it belongs to HMRC.

 

[conny]

Had a friend in a similar situation until it was suggested he keep a weekly account of what comes in. Separate what was taxable etc and put this amount into a totally separate account, (preferably one that earned a decent interest over the year). Then put a 'wage' in another account for your salary. Anything else is classed as business money and should be kept track of accordingly. He started doing this and has never dreaded the tax man since. It also gives a more accurate picture of what you have for yourself.

 

[Daz66]

I work PAYE so the answer is no!

Although to be fair I earn just enough for what goes out with perhaps a little bit spare from time to time.

When I did work SE I put one third of everything I earned into a separate account ready for the tax man which covered me nicely.

I find that so many people live on credit in today's society and that the money they do earn is just used to pay for this months installments on everything from sofa's to cars, they very rarely have any savings and when a big bill comes in they get stressed to the max.

A little while ago a receptionist where I worked was sobbing uncontrollably at her desk and I thought someone in her family must have died, actually her car had failed its MOT and needed a part costing £200 and two new tyres, she was sobbing because she couldn't afford it yet sat there with a £1,000 watch on and had just got back from a £4,000 luxury holiday in Egypt.

Priorities are what people should look at not what they want!!

As for your situation just sort out where your money goes and keep an eye on it, it wont take long to start saving and you will soon have as much as you need all round.

 

[longdogs]

Thanks for the replies.

I treated myself a few months back to a cheap electric guitar and a practice amp but that's the first treat I've bought in about seven years, so feel like I have been working all that time for one present to myself.

I think I will have to 'up' my prices a bit and hijack a fuel tanker.

 

[JBR]

I like having a good work ethic but should I just get on the end of that dole queue?

Good question. It's not surprising that so many opt for the latter, and I'm not getting at the genuine unemployed here. I sometimes feel that the government don't do enough to encourage hard workers.

 

[AndrewDavie]

Do as our great leaders do and put everything including groceries and heating on business expenses? (J/K)

 

[masona]

Surely having a clever self employed accountant should already be aware of the tips and loophole for paying less tax?

 

[crystal ball]

I like having a good work ethic but should I just get on the end of that dole queue?

Good question. It's not surprising that so many opt for the latter, and I'm not getting at the genuine unemployed here. I sometimes feel that the government don't do enough to encourage hard workers.

My wife was made redundant this year, signed on for JSA, £70 a week and had to apply for 20 jobs a week, 20 mile round trip to sign on, was not worth the hassle tbh

edited to change 10 jobs to 20 a week

 

[crystal ball]

Surely having a clever self employed accountant should already be aware of the tips and loophole for paying less tax?

I don't think there are many big loopholes for the average S/E worker, all my accountant says is claim for everything and she will tell me if its ok

 

[Micilin]

It's worth doing your accounts this time of year and seeing what your bill might be. Then make a judgement on whether to spend the money you have on plant/ equip/vehicle/other to offset against tax by reducing profit and increasing capital allowances. ie ask accountant is it better to give X to the revenue, or spend Y on something and claim for it

 

[Nige F]

I
and had just got back from a £4,000 luxury holiday in Egypt.

.

Sure it wasn`t a £400 Luxor holiday

 

[ladylola]

Do I earn enough? Well we don't go hungry and the house is paid for so I suppose the answer must be yes.
Do I earn a fortune ? No, and I'm probably earning less than in previous years but I fully believe that one can be earning less but still be better off at the same time.
I suppose our "secret" is that we've always kept one eye on the future and put money aside, not wasted it on unneccesaries , and paid off the debts as soon as possible. The mortgage for instance was taken out when we moved and paid off six months later.
For the record I've spent most of my working life on PAYE until redundancies stopped that and I'm now self employed but as I've said live frugally without debts and one can live decently on a lower income.

 

[JBR]

I like having a good work ethic but should I just get on the end of that dole queue?

Good question. It's not surprising that so many opt for the latter, and I'm not getting at the genuine unemployed here. I sometimes feel that the government don't do enough to encourage hard workers.

My wife was made redundant this year, signed on for JSA, £70 a week and had to apply for 10 jobs a week, 20 mile round trip to sign on, was not worth the hassle tbh

What's the point? The government, in its wisdom, doesn't seem to have realised that with the imminent arrival of people who are willing to work for peanuts there are not going to be any jobs to apply for as far as we are concerned.