Though there are many ways to be self-employed these days from starting your own consulting business or working multiple mini-gigs such as online retail, delivery driving, ride-sharing, etc., there is one common factor- you must create a budget.
Some self-employment options do not require a financial investment, others require a significant investment such as manufacturing a retail product or any idea that requires more that one person to execute on the concept.
Consider, many first-time self-employed individuals are focused on making money to have more to spend on necessities and perhaps more of the things they enjoy. This is often the motivation to begin with: more income = more fun, right? However, it is important to consider some questions along the way.
Am I going to get back more than I put in?
You always invest when you are self-employed, whether is is time, effort or money. When you invest into your boss-less lifestyle, you should consider the value of what you will get for what you will give. Are the hours you are putting into delivering meals going to pay the bills? If not, how many hours will it take to get there? Are there other options out there to bring you the same benefit with fewer hours? Enjoyment of the work is also value- maybe the fulfillment of the type of work makes up for the extra hours or pay rate.
Are the jobs seasonal?
If the work is seasonal, so is the income. Let’s say you make custom swim wear. Chances are, you are going to sell a lot more product in the Spring and Summer than you would in the dead of Winter. If this is your only or primary source of income, you want to make sure you are saving money and maybe even allocating yourself an income or budget that can get you through the dryer months. That may mean living on a leaner budget even in the high-volume months.
Will the tax bill be a surprise?
In addition to paying yourself, you also have to pay your own taxes when you are self-employed. You are now likely responsible for paying self-employment tax as well as income tax. Since you may not have an employer deducting and paying taxes on your behalf from your earnings, it falls on to you to make routine payments, typically quarterly. It may be a good idea to speak to an Accountant and reference the IRS guidance for the self-employed: https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center
Get out there and hustle, but also take a good look at your finances along the way. Understanding your financial needs will make the self-employment game a lot more enjoyable because there may be fewer surprises. A little planning goes a long way when you are self-employed.