Are you self-employed and wondering how to get on top of your finances? Money management can sometimes feel like a bit of a minefield, especially when you’re getting to grips with a new business. Our Finance Specialist Shahin has shed some light on his main tips to improve your 2021 finances and ultimately get you in control of your money…
KNOW WHAT YOU’RE DEALING WITH
It goes without saying, it’s important to know where you stand with your finances. This includes How much debt you have, your income and outgoings, and how much money you need to breakeven, both in terms of business and personal finances. By looking at the whole picture of your financial situation, you can start to change things and gain control, whatever your earnings. Some people might have a good income but are in financial difficulties because they don’t know how to manage their money, whereas others on lower incomes might be better off because they’re better able to manage their money and put aside for savings. EnterprisingYou can help to teach you ways to do this.
MAKE A PLAN
Budgeting doesn’t mean completely limiting yourself to a small amount of money. Budgeting is asking if you are following the right plan, regardless of earnings. That can be good for your income, expenditure and savings. The best budgeting plan is the one that suits you personally, and everyone’s budget is different. EnterprisingYou can provide budgeting advice, by looking at what you normally spend on regular outgoings (such as utilities, insurance or pensions), and identifying where you can save. In most cases, after going through the financial assessment, we find that clients can easily save £100-200 on simple budgeting. This money can be saved from non-essential expenditure and placed into your pension pot instead, without compromising on comfort.
This is all about taking into account your pensions and savings. A lot of self-employed people, especially those on a low-income, don’t actually have any pension contribution. The self-employed don’t get any holiday or sick pay from an employer, either, and risk financial difficulties when retiring because there’s no future plan. If you can save £100 in your pension pot per month, you could have up to £70,000 pounds saved in total. That can be a big relief, to know you have this for the future, outside your state pension.
KNOW WHAT YOU’RE ENTITLED TO
If you know what you’re entitled to, you can plan for what you need to claim. Although many people have been unable to claim financial support during the pandemic, there are also many people who don’t know what grants and benefits they could receive, or what money they can borrow. For example, some people are claiming universal credit but missing out on additional council tax support, whereas others might have a health condition but aren’t aware they can claim certain welfare benefits and carry on working or saving at the same time. EnterprisingYou can help clarify things like this.
DELETE YOUR DEBTS
Not all debt is bad debt; it is only truly ‘bad’ once it’s out of control. If, on the other hand, you’re on top of exactly when and how much to pay back, it is much less of a problem. EnterprisingYou can help you to manage this. For instance, one EnterprisingYou client, a wellbeing therapist, wasn’t making any money during the pandemic. We were able to point her towards the Businessdebtline, who help to get a debt relief order; she’s now debt free. We can help you get out of debt and go into saving mode, which can involve keeping an eye on your credit score and finances.
Looking for a more in depth look at your finances? Here’s what some of our clients had to say…
'Through speaking and working with Shahin, the client has confirmed that now he is receiving £250 per month form DHP for rent short fall. His water bill has been reduced to £190 from £600 a year. United utility has also rewarded him £1000 toward his water debt. Further to FS's advice he also managed to get £2000 from discretionary additional grant from LA. The total financial gain was over £5800. Client was very happy about the support he received from EY. Client is still working on innovation fund and renewable energy fund.'
'Working with Shahin the client was able to get a grant from the United Utilities Trust fund to purchase a new washing machine'
Maureen Anderson Smith
'Working with Shahin the client was able to reduce his monthly council tax bill by £100. Get a £56 per month discretionary housing payment towards a shortfall in rent. After suffering with health issues start an application for a personal independence payment, achieve a £150 yearly water reduction bill through united utilities and reduced a £94 per month UC deduction to £20 per month.'
We're here to help...
EnterprisingYou provide fully funded support to the self-employed and gig economy workers across Greater Manchester. If you would like to find out more about EnterprisingYou, register online, email firstname.lastname@example.org or call 0161 667 6900 to speak to one of our business coaches.
More information about the EnterprisingYou programme can be found here.