The Vault with Financielle - UNLOCKED: How to Budget When You're Self-Employed (Or Your Income Is Unpredictable!)

Episode Date: February 17, 2025

Send us a text💸 Welcome to The Vault Unlocked – a special bonus series of The Vault Podcast, where we deep dive into the big money topics no one wants to talk about.Today we’re getting into something that trips so many people up: managing your money when your income isn’t predictable.Whether you’re fully self-employed, freelancing on the side, or working on commission, this episode is for you. We’re answering the big questions:How do you pay yourself consistently when some months are booming and others are quiet?How do you stay on top of taxes when there’s no one doing it for you?How do you make sure you’re actually making money—not just working endlessly and hoping for the best?By the end of this episode, you’ll have a clear game plan for managing a fluctuating income—without the stress.💬 Have a topic you’d love us to unlock next? Email us at [e-mail]👉 Subscribe to Financielle for honest conversations about money, and let’s rewrite your money story together.The Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

Welcome to The Vault Unlocked, where I take a deep dive into money topics that no one wants to talk about. So many of you are watching Unlocked. I am loving you coming to us and saying, I want to hear more about this. Can you give me your perspective on this thing that's bothered me or loads of how tos actually. And that's what's driven this particular episode. So if you've got a suggestion for us,

email in the vault at financial.com and we will look at maybe see if we can cover it. This one we get asked about all the time and it's how to manage fluctuating income. This could be if you are fully self-employed, it could be that you freelance on the side, it could be that you're thinking about doing side hustles, or you might want to make the leap

from employment to self-employment, which by the way, just a side note, not for the faint-hearted, so many people in the internet world will glamorize being an entrepreneur, being self-employed. It is hard. And it's not that most of you aren't afraid of hard work, but the nine to five is dissed so often,

but you know what comes with a nine to five? Relative stability, you know, outside of making sure that you've got an emergency fund and that you're protecting yourself. But relative stability, guaranteed income. You can use that income more easily to do things like borrow for a mortgage. You will get pension contributions. You will get paid holiday, you don't have to chase

your employer hopefully to pay you on time like you would a supplier or a client. We will not be dissing employment in this episode but if you are interested in self-employment or you have an employed job that is commission-based or fluctuating income or bonus driven then I really hope this will give you some ideas on how to manage your money effectively. Two ways, one so that you or fluctuating income or bonus driven, then I really hope this will give you some ideas on how to manage your money effectively. Two ways, one, so that you don't feel in a place of stress, but two, that you can actually use your money

to grow and build momentum and build real stability in being self-employed or having that fluctuating income role. It's a question that many people in the employed world have probably wondered about the self-employed world. How do you pay yourself regularly on a consistent and stable basis when you don't know what money is coming in or more importantly also going out in your business? How do you stay on top of taxes? We have had so many times from you in January that you hate January, it's tax time. People really don't plan ahead. They underestimate what taxes are gonna be. They don't put money aside for it.

And listen, life's busy and it's hard. And sometimes you have needed to use that money to feed yourself and to pay your bills. And so it's this incredibly difficult scenario to manage. And those people that are just on the edge of making enough money to cover your bare essentials and then not also thinking about tax at the same time. It's incredibly difficult and so this is a judgment free podcast. We are not judging anyone, but we're hopefully going to give you some suggestions and also

shine a light on this money management when you're self-employed or fluctuating income. It is hard. So I really think this episode is going to be interesting for everyone. Those of us in that space, those of us going nowhere near that space, but having empathy with what it's like. It might make us like our salary and our paycheck a little bit more, but if we're thinking about moving over to the other side, we're hopeful we'll be in a better position and we'll be more prepped. So we're going to jump straight in to Unlocked and we're going to talk about this reality of being self-employed. So when you are self-employed you are responsible for everything formally when it comes to your paycheck. What I

mean by that is you're responsible for bringing in the money that can pay your wage. So if you're a nail technician you're responsible for making sure that you have clients. If you are a marketing executive or consultant freelance marketer you need to make sure you've got clients. If you are a marketing executive or consultant freelance marketer, you need to make sure you've got clients. If you're a builder, you need to make sure that you have the contractors that will subcontract you and that you've got that steady flow of money. So you have to bring the money in.

Because you have made money, you are also responsible for paying your taxes and national insurance. That's in the UK or whatever the equivalent is in the country that you're listening. So you have to think about that from the off, from every single time money comes into your business or comes to you as a self-employed person. You have a legal responsibility to pay tax on income generated. Now we're not going to go into super detail on the amounts of tax and types, firstly because it changes constantly, second because it's different everywhere and there are lots of

different nuances depending on your personal circumstances, but you are responsible, no one else, for paying HMRC those taxes and national insurance contributions. You are also responsible for paying into a pension. This is one of the biggest worries I have about the self-employed community. You know, for a community that works so hard, that grinds every day to bring in revenue, you know, the idea that they're not preparing for retirement,

either unintentionally or intentionally because there just isn't enough money and they just don't want to, really worries me. They're already missing out on the employer contribution, but to not put any in themselves means they're just going to slip further behind. And also responsible for business expenses, so any costs that you need to make to make the business go.

We're going to focus mainly on sole traders in this episode. That's the most common route for freelancers, for contractors. Some people do decide to set up a limited company and whilst there are certain protections that come with doing so, there's also an awful lot of extra admin you have filings at company's house to do. It also isn't as tax efficient as it once was and so if you're thinking about going self-employed or if you're wondering which vehicle to use whether you use sole trader route or whether you use a limited company as a route, speak to an accountant because you want to get that set from the beginning and know what's required of you if you do go either route.

And again, if you are PAYE, which means pay as you earn, if you're an employee, your taxes and your national insurance and often your pension are just handled in every paycheck by your employer. Whereas when you're self-employed, you are doing that all yourself. So on that, let's jump to the challenges of the self-employed. The biggest one that trips up so many of you and so many people out there is tax.

When I say tax, I'm talking tax and national insurance as well, but I just mouthful every time I'll just say tax. A lot of newly self-employed people really don't understand how tax works. and when you actually account for it, when you have to do your tax return and when you have to pay for it and a lot of you who have had, you're a seasoned self-employed individual, you'll probably sit back and go oh my god I remember that first year I thought it was amazing because practically what happens is the tax year runs from the 6th of April in one year to the 5th of April the following year in the UK and what happens is the tax year runs from the 6th of April in one year to the 5th of April

the following year in the UK and what happens is you track kind of the income that you make during that year and you pay tax on that income but you don't actually have to pay it until the 31st of January the year after. So let's pretend we're coming up to April the 6th of April I'm going to start being self-employed I'm going to earn money all to April, the 6th of April, I'm going to start being self-employed. I'm going to earn money all year round until the 5th of April, 2026. I then have until the 31st of January, 2027 to pay my tax bill for the 25-26 year. That is so far away. You can really imagine when you first start in this process,

but you need to be organized from the beginning. This is an example way of breaking up the year to really tackle your tax and national insurance obligations. So first up we are in April, the new tax year begins. Really good opportunity to reset your finances and start tracking. If you're an established self-employed person, if the previous tax year you've made money, this is a really good time to get everything in order, all your paperwork from the previous year. What did you earn? What were your business expenses?

Now for absolute HMRC brownie points, you can from the 6th of April, do last year's tax return. So you can get that done. You don't have to wait until later in the year, but lots of people do wait, and we're gonna play with the method that you'll wait a little bit. But if you really wanted to on the 6th of April,

you can ask your accountant and say, I wanna do last year's tax return, or you can go onto HMRC's website if you do it yourself, and you can do it. You can do your tax return and not actually have to pay your tax bill still until the 31st of January. So you can do the work and do the paperwork

and know how much you're gonna be owing HMRC. A lot of people don't know that. Let's pretend you're not gonna do that because we're in April, it's a new tax year, we're very excited. We're just gonna get organized and make sure that we are documenting all the money coming in and all the money going out.

From the get-go in April, you need to be putting aside money for tax and national insurance. Now, I cannot answer how much that should be for you. This will completely depend on your projected income, income from the previous year as a guide and what your expenses are going to be and what are allowable expenses. And that's not for us to go into here.

But if typically you're a basic rate taxpayer, people find it useful to put between 25 and 30 percent aside. When I've spoken to lots of self-employed people, what they tend to do is ignore expenses and just from income, if they're a basic rate taxpayer, they tend to put aside 25 to 30 percent of their income into a separate account, either a pot, if you've got pot functionality, or a separate account. And you do that from April. And do you know what the easiest thing mindset wise to do with this is actually acknowledge

it's never yours. Whether we like it or not we have to pay tax and when someone gets paid through a salary that 25 to 30 percent depend on obviously tax brackets is taken from them. That is put into a separate pot as and it's paid straight to HMRC. You don't have a choice to spend it and then save up for it later. And so a super, this is just like sinking funds, a super good discipline to get into is acknowledging that that set amount,

let's pretend it's 25%, you put aside into a separate account or a separate pot because it's not yours. It's actually the government's and none of us like own the government money and they can be pretty mean about it when you do owe them and you don't pay them. So from April, we are looking at the income that comes in, we are taking a chunk and we're putting it somewhere else.

On that note, whilst we've mentioned pension lightly, the same thing you should be doing with a pension if you're self-employed. You should be picking the percentage that's right for you according to your age. And we've talked about this before on the investment podcast, but according to your age, according to your age,

according to the size of retirement part that you wanna build, this is the time to do the same thing. Take it off just like a salary. And I promise you, you won't regret doing that. Between April and August we're kind of in this chill time when it comes to taxes because hopefully what you're doing is for the current tax year you're building up your tax pot at the side, tracking your income and expenses really cleanly, but these are the months to start definitely looking at your tax return that will be

due by the 31st of January 2027.. Mentally, I would recommend people ignore December and ignore January. Pretend that November 30th is your deadline because accountants go away and receipts go missing and your memory is like, oh, what was that for? What was this? And suddenly you've not got long before the deadline. And so between, you know, May, June, July,

start getting things together and look to do a tax return. As I said, you don't have to pay it yet, but you're at least making sure that you've got time if you haven't saved enough. Once you know the figure that you owe, hopefully, and if you followed this methodology that we're now telling you about, you will be okay. You will have a pot of money ready for HMRC.

And honestly, it's up to you whether you pay it now or whether you hold onto it and earn interest on it and do as best you can. Lots of people just like to get it out the way and get it paid. And then if you haven't done it yet, you know, you are coming into December, January. It really is a stressful time. The number of TikToks I saw this January of people going, Oh my god, it's the worst time of year. Like it's January's stressful already and I now owe money and I didn't have any savings and I spent them over Christmas because emergencies happened and da da da da da da da and stuff like just life does hit us.

But remembering that at the very very least you need to pay it before 30th of January to make sure that you don't incur any interest or penalties on that tax due. So tax can be the biggest pain for so many self-employed people. Making sure that you're saving it as you go along. Treating it like it's not yours, I promise you, will make you feel a ton better. It also makes it very clear kind of how much you're making on a personal basis, how much you're taking home

rather than having it all lumped together. I should have said this a little earlier actually, but make sure if you are self-employed that you have a separate bank account. Doesn't have to be a business one, you can just open a separate account, but later you will thank me when you're going through all your figures and you don't see, you know,

random Netflix payments and mortgage payments and this, that and the other. If you can keep it super clean and have your business income and then your business expenses in one bank account, when it comes to the tax return, you're going to be in much cleaner place, it's going to help you out, it's going to make it quicker. So that's the blueprint for the perfect tax return.

Make sure you register with HMRC. Make sure that you are tracking your expenses as you go, putting money aside, trying to do things ahead of time, staying well ahead of deadlines. Just like, imagine you're a student and you get an extra credit. Like, that's what you want to lean in for when it comes to taxes and just get it off your desk.

And just don't wallow and get annoyed and feel regret for the money that you could have had. It was never yours and for the rest of people that are employed, they never see that money anyway. We're going to move now onto budgeting a fluctuating income and obviously this can both be self-employed or it could be commission-based or it could be bonuses or it could be getting paid at different times, it might even help those people. When you have no fixed paycheck, you can have some high earning months and low earning months. It can be really hard to budget, it can be really hard to know what to pay yourself and what you can afford to plan ahead for.

Those of us that have a regular salary can at least budget that and budget our sinking funds, know whether we're going to hit our goals. Whereas if it's all up in the air, that can be really hard to do. There's so much seasonality in this type of income. December may be crazy busy for the beauticians and the hairdressers and the barbers, but then January may be really quiet as people have overspent a little bit and want to pull back on their aesthetics. Another discretionary spending. Let's jump straight in with a case study. So we have Elle, Elle of Financial. Elle is a freelance marketing consultant

earning between 1,500 and 4,000 pounds a month, depending on the work she has in the pipeline. Her biggest struggles are one, an irregular income. So it's really hard for her to plan ahead because she has these high months and low months. She doesn't set aside tax money so the first tax bill was a real shock and she's kind of wanting to get ahead for the next one and she just tends to spend whatever she's earned that month without a system. So Elle clearly needs a strategy to manage her money so she needs a

budgeting method and really there are two standout ones when it comes to managing money as a self-employed person or someone with fluctuating income. Firstly is the work a month behind method. Do you like the name? We thought along hard about that. Instead of guessing future income, you can based this month's income

on the income from two months ago. So it's not working two months ahead, but you do use the income from two months ago because typically you might get to the end of the month and work out what you are being paid. I'm gonna give examples, so don't worry if you've lost me. So let's say it's January,

we'll take everything that you earned in January. So by the 31st of January, you know what you made in that month. And let's pretend it's a 1500 pounds month. Instead of using that for February, we use that for March and what that allows you to do is to work that month ahead. So if you had a particularly tight month in January, then for March your budget is based on January's money and you can know that we were tight this month. If you need to top up for any savings, you can do so.

If you need to cut back on any expenses, you can, but at least you definitely know this month if you need to top up for any savings you can do so. If you need to cut back on any expenses you can but at least you definitely know. Whereas if you use that income for February you are literally like 31st finally I know I'm £1,500 I got paid on the last day of the month and I like I'm already got bills coming out on the 1st of February so it's just very very tight if you have particularly low months sometimes. It works because there's less stress because you know the money that you've got to work with. It gives you time to put money aside for tax and expenses. It helps to create a more fixed salary, even with an inconsistent income

because you can plan for it, you've got time to plan. It gives you kind of one to two months breathing space if income does drop a lot and you need to do something drastic. So the way that Elle navigated this method does involve work upfront. She saved one month's buffer upfront. This emergency buffer helps to bridge that gap

and allow her to work a month ahead. So picking a high average one month's expenses to act as a buffer, this is different from an emergency fund, but to act as that buffer means she can always stagger her income months with her budget months. Now she only spends from the income from two months ago and it keeps it more predictable. Lots of you use this method. It's not a method that lots of people can jump straight into if you don't have the right

emergency savings and it takes you a while to get a month ahead, but when people get there, honestly, it's one of the more freeing things. Side note this is a method that lots of people in couples with different paydays also use if you've got really random paydays like I'm every two weeks and she's once a month or if it's I'm in the middle of the month and she's at the end of the month and it's kind of how do I can't mentally get my head around it? Sometimes it's just easier to go sod it I'm going a month ahead and you do that same thing You save up and you kind of move money out into a separate account and then pay yourself

From that account on the same day as your partner if you're managing come to if you manage money together manage your budget together And it's done the same way This is about peace of mind and time and breathing space, much more than it is about being super detailed and super savvy. So the other budgeting method that Elle could use is what's called the waterfall budget. So you handle your needs first, that's anything essential,

anything in your personal budget that you have to pay for. We're talking all the fixed bills and stuff, but also things like essential grocery spending, essential house spending, essential travel. The bare bones income covers the bare bones budget expenses. So we have like our basic basic needs covered, which gives us peace of mind, helps us feel more relaxed, help us feel more in control. Anything above that income that comes in, we then start to allocate in kind of like a waterfall effect. So the next priority is things like your lean sinking funds, so sinking funds for things that are coming up that you,

so you need to use the next income in your budget for these lean sinking funds. Next, we come down to extra spending and excess. So again, hopefully you know about the financial method, but your excess is the stuff that you put towards your goals. I don't want it to seem like the excess should be last, but we're talking about making sure that we're prioritizing needs here.

And so I'm going to put it last in this scenario, but it's kind of joint with extra spending. So the income initially has covered the bare bones budget expenses. It then comes down in a waterfall and covers our lean sinking funds. It then comes down in a waterfall and covers our lean sinking funds. It then comes down and any more money that comes in that month gets used

for your additional expenses. So you're nice to haves, your extra treats, your eating outs, you booze your sinking funds and making sure that we take care of our excess, which is making sure that we're building up savings, paying down debt or obviously investing. This works in two ways. It works when you have super low income month and you need to be able to just prioritize

the absolute basics. And in the financial app, I know people do a basic budget and a bougie budget. And so the basic budget helps them know what exactly you cover. And then any extra income that does come in, you can allocate it. Now, people do it creating two separate budgets. Some people also do it creating a bare bones budget. And then in the actuals, you kind of do it that way. But you can also do it if you have a basic budget

that's quite good and that you know the basic expenses are gonna be covered, but you could have a really big month. And what I always want is if you are in a commission-based business, in a bonus-based business, in a scenario where you can have a really big, busy December, let's take a beautician in December,

I don't want extra money to feel like a bonus. I want it to go to something that's a plan. And so by having a budget, having these thinking fund targets, having your excess targets in place, any extra money that comes in needs to go towards those things. It's not, oh, should we all go out for dinner

because we've had a good month? No, no, like put that in the eating out fund. It needs still be, it still needs to be planned for, but you can see how this waterfall budget is quite flexible in giving you this ability to cover your basic needs but then as more money comes in as you go above that really small income threshold you already have a plan for where the water is gonna go, i.e. the income is gonna go. Let's have a think about how our case study L could use the waterfall budget method.

So she will take her lower month, her £1,500 month, and try to build a budget around that, an absolute bare bones budget. But let's pretend in a particular month she actually gets paid £4,000, her highest month. What she would do is her £1,500 first will be allocated across all those bare bones essentials. Next it'll flow down to sinking funds and because she knows she's got 4000 to deal with she actually doesn't have to go lean with the sinking funds. She can fill them as much as she wants to. She can go to the mubusier stuff. She can have more in her groceries or more in her eating out whatever her treat is to her and more importantly she can make sure that she prioritizes her excess so that she's either paying off debt,

she's building savings, or she's investing. So that is the waterfall method where you have your absolute essentials and then the more money that comes in in that particular month, it flows down the kind of the list of priorities. Now there's a sneaky third method which is only available to you

if you have really good emergency savings. But basically, you take an average and you pretend that's your salary. And if you fall below that average, you scoot from savings and you use that to supplement. That's only doable if it truly is an average and so you're going to have some high months and some low months. So that's an option for people with savings. And so you can plan to get there as well but you know across those three methods hopefully there's a method that for your point in time that

you're at you can use that method to take back control of your money as a self-employed person or as a household that may have fluctuating income. Next we're going to talk emergency funds so everyone knows we need emergency funds and what do we say when we're talking about having an emergency fund? We talk about making sure that it's linked to your risk profile. That could be whether or not you have sole responsibility for bills. It could be that you're in a risky industry and it could be that you're self-employed. So we are in that space. We are in the riskier category when it comes to deciding

what a bigger emergency fund looks like. On top of this, when you work for yourself, there is no sick pay, there is no pension, there is no paid holiday. So you really should be factoring this in when you're picking your bigger emergency fund amount. This is another reason why it is so much harder for those people that are self-employed

or that have quite a considerable fluctuating income. The risk is higher and so to feel better, we need a bigger stash of cash. It's not just a personal emergency fund that you should think of, but it's also a really good idea to think of a business emergency fund too. This is especially important if you have quite high business expenses. So if you do have rent to pay somewhere or quite a lot of travel expenses. So having a really good personal emergency fund, but also thinking about a good emergency fund for your business is a great way to feel in control,

especially if you have a lower income month. This is all easier said than done. I'm not unaware of the fact that it's easy to say, so make sure you've got some money here and make sure you've got some money there. That's this is where we're gonna get to and if you're not quite there yet, at least making a plan for those

will absolutely set you up for success. So having those emergency funds there so that you can focus on what you do best. You can focus on working for yourself, bringing the income in, knowing that if it is a tougher month for whatever reason, you have savings to back you up if you need them. You may also have a personal emergency that comes up

that means you can't work for a period of time. There are obviously really important protection insurances for stuff like that, but otherwise you need to factor this into your risk. And just like with the personal side, do not use credit to fund your business unnecessarily. It's even more pretend money when it's business credit. There's one thing having a personal credit card, with the personal side, do not use credit to fund your business unnecessarily. It's even more pretend money when it's business credit.

There's one thing having a personal credit card, but a business credit card, it's kind of like not yours, but it is. So please take your value system from your personal finance into your business finance. Growing a debt-free business is an amazing thing to do. Sometimes you do need to use credit, whether it's because of stock or other issues.

So I'm not saying it's a never, but don't be so easily tempted. Focus on building a cash strong business that as far as possible is high income and low expense. Now, this podcast is a bit more technical than some we've done, and it may not be as easy to listen. You did ask for it. And so we did want to make sure you come away with some actual takeaways. And so we've talked about the biggest problem that you guys have with being self-employed and that's managing your tax or getting ahead with it. We've talked about the different budgeting methods that you could use if you have fluctuating or different or unpredictable income. And so please have a go at some of those, find the method that

works best for you. The answer to lots of them is make sure you have extra cash. And so it is a bit of an uphill struggle at the beginning, but once you've done that once, you really will feel the benefit. And we've also talked about emergency fund and having as much cash behind you can lead to a much more successful self-employed career. It really, really can. But there's a few more extra hacks

that we have gathered over time from speaking to you guys from our experience working with people and managing their budgets, which are just no brainers when it comes to managing income in this way. So first up, we did touch on it, separate bank accounts. Do not have your self-employed income and self-employed expenses coming in and out

of the main bank account. If you are doing side hustles, if you're doing freelancing on stuff, just keep it separate because it's the easiest way to provide data to prove what you need to pay for tax and also ultimately how successful your business is. So make sure that you use separate bank accounts. It doesn't have to be a business account.

You shouldn't have to pay for a business account for a typical self-employed incomes. Do your best to keep them separate. Also looking at the functionality of those bank accounts, do they have POTS functionality? That's where you could be putting your tax saving. Can you be making some money on your tax savings as you're going along?

You know, treat it a little bit like your personal income, make sure you're optimizing for everything. Next, stay on top of your expenses all year round. So many of us, especially with different types of expenses, shy away from using software. Some software is a bit heavy-handed for what you actually need it for, but once you learn how to use it,

a few YouTube videos, a few tips and tricks, maybe from a bookkeeper, actually it can really make your life very, very easy. And again, it can help identify what's profitable, what isn't, what you can go with your expenses, which income is performing best for you. So having, whether it be, you know, the zero or the quick books of the world,

or whether it's having a spreadsheet and making sure you're tracking everything, you will thank yourself later. You can actually export often from bank accounts into a spreadsheet as well. So you don't have to manually type everything out if you don't want to. Many of you do use a financial app to create business budgets, which I absolutely love. So many people came to us and said they did that. We didn't know, we didn't predict that, but they were kind of realizing

that their expenses are quite high sometimes in business. What can they do to optimize their expenses? Can they squeeze their business budget? And it really made it look like a P&L for them and was a really game-changing for how they focused on their business expenses rather than just going day-to-day. They kind of could look at it on a monthly basis and a bit more strategically for something that typically isn't hardcore business, if it's your sole trader,

you don't have lots of moving parts, it's quite a simple business. And so whilst it wasn't designed for that, I'm here for all you people actually using it to manage your businesses. Lots of us can do our tax returns ourselves, but you may be paying too much tax if you don't know the expenses that you can claim. And so I use an accountant to do my self-employed tax return, even though I feel like I've got a good handle on it. Let's make sure we're not paying too much tax

if there are genuine legitimate allowances for certain business expenses. Do the work and make sure you know what you can deduct so that you pay as little tax as you legally have to. Another hack is embrace financial sinking funds for your business. It can be really good way of making sure you've got enough pots for the expenses that come up.

It could be, as we've said, for your tax and national insurance. It could be for big annual business expenses if you want to benefit from annual fees rather than monthly fees, you could put money aside just like you do in your personal life and pay for them in bulk and take advantage of that often cheaper price. It could be for something seasonal, there could be some really big events that need

a lot of money upfront and you can save for those in advance rather than having to rely on credit, or you may have to pay out for stock at certain times of the year and so being ahead of that and putting the money aside and not having it like in the regular bank account can really help. Again, we're talking about sole trader and super small business here. We're not talking about big business expenses, but it is a way, if you are the only person,

if you do not have a CFO sat next to you, if you are the CFO of your business, making sure that all the money is there already will give you the same peace of mind that it does in your personal finances. Making sure every month you track your expenses, this is why actually doing a budget in the app can really help, but if you wanted to use software,

I have been through, for example, our business expenses before and realized that sometimes we were overpaying for subscriptions or we were double paying sometimes by accident, we've all been there. As a landlord, I was paying for, until I used the life admin section of our app where I tracked all my policies, for, I used the life admin section of our app where I tracked all my policies and For I used it on a personal level, but I didn't use it for my kind of business not financial

But for my rental property, I was paying for two landlord insurances. My husband was like, oh Great that you use the feature in the app that we built and No, and so I was double paying for insurances and so having that And so I was double paying for insurances. And so having that time, like taking that money minute to go through and check is worth it. It can pay dividends, both in personal and business finance,

because it does feel a bit more pretend in business and we wanna be able to make sure we're not overpaying. Also for our people that do side hustles or generate extra income on the side, don't forget that you do in the UK, get a 1000 pounds trading allowance from HMRC, where you can earn that tax free. You don't have to fill out a self assessment

or anything like that. It's a good idea to track your expenses and track how close you get to that. This applies to your total taxable side hustle income. So if you are generating income in that way, head to HMRC and check what you can qualify for to make sure you're not paying tax on that income, but you're keeping an eye on the threshold.

So there are the last hacks and I hope that after what we've been through, you're gonna paying tax on that income, but you're keeping an eye on the threshold. So there are the last hacks, and I hope that after what we've been through, you're gonna be able to have some actionable stuff that you can go away and think about, tell your friend if they're self-employed and you think they're a bit chaotic with their tax bill or their VAT bill or anything like that. Or if you think you wanna be tighter on your expenses,

or if you are in this situation where you have fluctuating income as a household and you're trying to work out how to do it. It doesn't have to be overwhelming. All you need is a system that works for you. If you found this episode helpful, please do share it, especially with your self-employed friends. We want to help them as best we can. And before I close the vault, we are loving the suggestions and the questions that you have that we may cover on the vault. So please do email into the vault at financial.com and let me know what topic you'd like to hear from next.

Just a disclaimer, The Vault Unlocked is a lighthearted chat around life and money we are not giving financial advice. Bye bye.