5 Ways to Prepare for Self-Employment
But first, do the homework.
Photo credit: Sarah Natasha Photography
Nowadays the term “entrepreneur” is part of our normal vocabulary, but no one striking out on their own becomes an overnight success. If you’re thinking about pursuing self-employment and running your own company, here are five ways to properly prepare yourself for setting out on your own.
DO YOUR HOMEWORK
Self-employment is not for the faint of heart. If you are committed to pursuing the pros of working for yourself, you also have to be hyper-aware of the cons. As you contemplate leaving the financial stability of your corporate job, begin to evaluate the added stresses that come with being a company that is a party of one. For example, I thought critically about having to pay a very expensive health insurance bill every month where previously health insurance had somewhat silently been deducted from every paycheck.
"Self-employment is not for the faint of heart."
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I determined that the stress of that monthly payment would be more worthwhile than the stress I was feeling from my corporate gig where I was feeling unchallenged and unfulfilled. I also looked at what I would be doing from a day-to-day basis that couldn’t be covered by a team. I’d be offering clients my services from the ground up and they’d all be handled by me - no delegating up or down on a team. By thoroughly researching what your new normal will look like, you’ll be in for less of a shock when you become accountable only to yourself.
NETWORK
By far the most valuable thing I did in preparing for self-employment was tapping into my network. I began seeding to my friends, family and acquaintances that I was planning to leave my job to consult and one by one my network grew.
Everyone wanted to put me in touch with someone who’d had the courage to do what I was planning to do. I began speaking to loads of other freelancers and consultants and I came prepared to every meeting with a list of questions. Every encounter held a powerful and helpful takeaway and the more people I spoke with, the more my network expanded and the more business leads I started to pull in. Those I spoke with also were incredibly valuable when it came to setting the costs for my services, determining what tools I’d need to invest in and helping to provide guidance on how to successfully manage my business.
GET ORGANIZED OPERATIONALLY
There’s a lot that goes into operating your own business and some of the things may even surprise you. Before you leave your job for the land of self-employment, I recommend starting to get the pieces of the operational puzzle in place. One of the first steps I took was finding a lawyer who could incorporate my business. Then I set up a business banking account so I had a checking and a savings account for the company and also a credit card for all expenses. I got set up on Quickbooks to run the financial side of my business and also built a forecast so I was setting goals for myself to meet from a revenue standpoint.
"Before you leave your job for the land of self-employment get the pieces of the operational puzzle in place."
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Next came working with my lawyer to draft contracts and other necessary paperwork I would need to run my business from a client services perspective. I also developed a capabilities deck I could send to prospective clients, built a website, ordered business cards and developed a list of companies I was interested in speaking with. Once everything was done prior to leaving my job, it was easy to hit the ground running pursuing business because I had prepared all of my operational to-dos.
PLAN FINANCIALLY
Before you commence self-employment, you have to first accept that you won’t know from where your next paycheck is coming. Which translates to having to prepare financially for those inevitable times that you won’t have steady pay coming in. Knowing I lived in the most expensive city in the world, I put pen to paper to determine what living in New York was really costing me every month in regards to expenses. I signed up for a Mint.com account to build out a budget and for two months tracked my expenses. Once I had an idea of averages in particular categories, I built out an expense worksheet for myself that included rent, health insurance, groceries, travel, utilities, etc. I knew I wanted to have whatever that number was per month times six saved before I pulled the plug on my corporate job so that when the time came to dip into savings, I felt OK doing so.
"Do the math and start saving accordingly before you up and leave your job."
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Do the math and start saving accordingly before you up and leave your job. You’ll be far better off down the line for having done so.
THINK LONG TERM
When you begin working for yourself you’ll feel like you need to say yes to whatever initial projects come your way because you fear the unknown. But when you accept projects or clients that you don’t feel passionate about, you’re defeating one of the best perks of being your own boss: the ability to say no. While you certainly need to pay your bills, you shouldn’t take on work that you don’t feel capable of delivering on or for people or brands that don’t make you feel invested in the work. If you begin to take on projects you’re not jazzed about, you are limiting the hours you have a month to pursue and accept jobs that will not only give you income but also fulfillment.
Meghan Donovan is the founder of mmd communications, a public relations and influencer marketing agency in New York City helping to elevate lifestyle brands with dynamic, meaningful ideas. In addition to her decade of experience in the marketing industry for major brands like Procter & Gamble and Virgin America, she also pens the popular life + style site, wit & whimsy. You can read more about her journey to self-employment here.
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How to Go on Vacation with $1,000 or Less
We all need some PTO.
By: Tia Johnson
I have learned over the years that you don’t have to spend large sums of money to go on vacation and have a lovely time. Whenever I see a person win a prize vacation for a total value of $5,000, I would become confused. Several questions come to mind: Why does that vacation have to cost $5,000? Does it include food and drinks? What about an excursion or a tour? I believe that’s one of the main reasons why some people think they can’t go on a nice vacation unless they save their money for at least year or make considerable sacrifices to afford a vacation. Let’s look at seven creative ways you can go on a vacation for a $1,000 or less.
Think of a Cost-Effective Plan
Having a game plan for how you will make the most of your vacation will save you from rushing to travel on holiday weekends or other popular travel periods, which can lead to overspending. Your game plan can consist of beach hopping with friends. For example, several weekends can be dedicated to going to the beach. You can stay at a house or an apartment via Airbnb, buy food that’s easy to cook, such as burgers and vegetables you can grill, and split the cost with your friends or whoever you're traveling with.
Look for Combo Deals
Groupon, Expedia, and Gate1Travel have getaways with hotel and airfare (and sometimes an excursion) included at various price points. Some trips (hotel + air) are as low as $499 when you travel with a friend. Other trips are for all-inclusive resorts where you don’t have to pay for food and drinks because it’s included in the price. However, you can go to a local market to buy food so you won’t eat out as much or you can pack your snacks in your checked bag.
Go on a Road Trip
My friends and I are going on a road trip from Philadelphia, Pennsylvania to Ottawa, Canada. We will split the cost of gas and we buy food for the journey. We rented a house through Airbnb that cost $97.62 per person. Based on our last road trip to Canada, the price of gas will be around $14/person and the price of food will vary. Think about where you can split the costs.
Book in Advance & Leave on a Thursday
Companies like Amtrak have deals where you can purchase tickets for cheap if you purchase it weeks in advance and preferably on an “off day” like a Tuesday or Thursday. Peak days are Fridays and Mondays because most people depart on Fridays and return on Mondays.
Repurpose Your Wardrobe
Going on vacation usually means a trip to your favorite clothing store to buy a few articles of clothing. However, why not repurpose what you have? Below are several ways you can repurpose your clothes:
Create your own distress jeans look by cutting and ripping your jeans.
Cut your jeans and make them shorts.
Tie the bottom of your shirt into a knot on the side on in the back.
Cut off the sleeves of a shirt.
- Make a crop top shirt by cutting your shirt in the area just above your navel.
BONUS: If you are a blogger who has been consistent with posting good content and can provide a media page, you can ask a hotel representative if they are willing to collaborate with you. The collaboration will consist of you offering to write a blog post and an Instagram post about the hotel and, in return, you receive a complimentary stay.
Based in Philadelphia, Tia Johnson is a spiritual lifestyle entrepreneur, an international speaker, Amazon best-selling author, podcaster, blogger, and creator of The Spiritual Lifestyle Collective. Through spiritual teachings and healing, such as chakra and Reiki, she helps her clients to pinpoint the limiting beliefs that prevent them from living a phenomenal life they love, to heal emotional setbacks, and to create strategic plans to execute proactive actions on a personal or entrepreneurial level.
Why It's Time to Ditch the "YOLO" Mindset
Your old pals dollars and sense say so.
Don't worry, she made that coffee at home...
These days, in our world of instant gratification (we may even be able to leverage our selfies to make purchases), it’s more necessary than ever to be able to stay focused on saving money any way you can. So to help you monitor your spending habits and cut expenses (to put more $$$ in your pocket), here are 20 easy hacks you can use every day—starting right now. Now, that’s instant gratification at its finest!
1. Have a weekly money date.
Commit to sitting down with your money once a week for a money date. During this time, update your budget, review your accounts and track your progress against your financial goals. Like any relationship, if you want your financial life to improve, you must spend time with your money.
2. Plan out your meals for the week.
Taking a few hours every weekend to grocery shop and meal plan for the week will definitely save you money, as dining out is the No. 1 expense for most households. By eating at home, you save money that would otherwise be spent on tax and tip—and you usually save calories, too.
3. Cut out cable.
Gasp! Cut out TV?! Never! But with services like Hulu, Netflix and Amazon Prime, you can now watch your favorite TV shows and movies for a fraction of the cost of cable TV. A study by NPD shows that cable bills will soon grow to an average of $123 per month, or $1,476 per year. By switching over to an online service or cutting out TV altogether, you can save that money for another financial goal—like paying off debt, traveling or saving for a home down payment.
4. Host a potluck.
The more friends you have, the more money you spend on lunch dates, birthday parties and gifts. Switch it up and instead of meeting over a fancy dinner, host a potluck and have everyone bring his or her favorite dish. That way you can save money you’d spend on restaurant extras like tax, tip and parking—and you’ll usually have a more intimate meal together, too.
5. Leverage Airbnb.
Finding a place to stay while traveling is so convenient when you use Airbnb. You can often find a place that has a kitchen (so you can cook meals at home to save money) at a rate that’s comparable to hotels. You can even rent out your own place on Airbnb while you travel to make some extra cash to pay for your own travel expenses. It’s a win-win scenario.
6. Make coffee at home.
This one’s not my favorite, as I absolutely love going to coffee shops and drinking organic, delicious coffee. However, spending $4 to $5 on coffee every day definitely adds up. So try my approach and allow yourself a few days a week to buy coffee at cafes, and make it at home the rest of the time.
7. Work more.
When you’re working a lot, there’s not much time left to shop and spend money. Stay busy and pursue a career you love—then watch how when you’re busy hustling, you spend less.
8. Wait 48 hours before you click “buy.”
Since we can have anything we want these days with just the click of a button (there’s that instant gratification again!), you need to find a system to help buffer your impulse purchases. Example: Wait 48 hours before spending money on things that cost more than a certain amount. When you do, you will find that most of the time the item was more of a “want” than a “need.” Plus, you’ll save money and work toward being more mindful with your spending.
Stop spending money on things you don’t need to impress people you don’t like.
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9. Use blogs and Pinterest to learn DIY beauty treatments.
Self-care is important—but going to spas and getting pedicures, massages, etc. can really add up. Allow yourself a certain amount to spend on these things, then use blogs and Pinterest to find at-home beauty treatments to help you save money. Often you can find a DIY, organic option using common household or kitchen products.
10. Outsource with Fivrr or Task Rabbit.
Time is a commodity, and your time is precious and valuable. And these days, there are so many tasks you can outsource that will save you time and money. But how do you figure out if outsourcing something is worth the expense? A great thing to do is to actually calculate the cost of your time, which will help you figure out if you can pay someone to do something for less than your hourly rate. Here’s an example: A monthly net income of $3,000 divided by a total of 160 hours worked equals an hourly rate of $16.75. Now that you know the value of your time, you can strategically outsource it, using a service like Fivrr or Task Rabbit, for a fraction of your hourly rate.
11. Get creative with gifts
Find creative ways to express your love to friends and family members for birthday and holiday gifts. After all, a handwritten note explaining why you love someone can be more sentimental than some expensive gift he or she may never even use. Most people will appreciate the thought behind your gifts more than anything, so don’t be afraid to save money and find free ways to celebrate birthdays and holidays.
12. Choose quality over quantity
This can apply to food, clothes, electronics and much more. Although it’s tempting to choose the more budget-friendly version of an item, sometimes choosing quality over quantity will save you more in the long run. Save up your money and get the best-quality product you can afford, and leverage the cost-per-wear philosophy with more expensive clothing and shoes. This applies to food, too: Buying quality organic food can nourish you in ways that fill you up more than the pre-packaged, processed stuff and potentially save you health care costs in the future, since you’re taking good care of yourself. Find a balance that is right for you and choose quality whenever you can.
13. Deal with your emotions.
A lot of times excessive spending is a way to avoid feeling certain emotions. If you check in with yourself before you go on a major spending spree, you may be able to identify if you’re feeling bored, lonely or stressed and spending money as a way to avoid the underlying emotion. Check in before you buy and be mindful with your spending.
14. Stop trying to keep up with the Kardashians.
It’s hard to keep your blinders on and not compare your financial life to others’, especially celebrities. However, it is really important to be clear about what matters most to you and make sure you build a financial plan that supports that vision. This will keep you moving toward your financial goals and stop you from spending money on things you don’t need to impress people you don’t like.
15. Read a personal finance book.
When you learn about personal finance, you’ll learn even more strategies to help you save money for your goals in life. Knowledge is power and the more you know, the more you can save.
16. Balance out your “YOLO” mindset.
With social media controlling our lives like never before, people often fall victim to the “fear of missing out” phenomenon and instead go overboard with a “you only live once” mentality. While it is important to live in the present and soak up each precious moment of life, make sure you balance that out by saving for your financial future, too. Without checks and balances in place, you can find yourself saying yes to everything and spending more money than you have—all because of the fear of missing out.
17. Map out your financial goals.
Be very specific with your financial goals. For example, saying, “I want to save for a home down payment” is not enough. You need to map out how much you need, by when, and what you need to save every month in order to reach the goal. When you know what your targets are, you’re more likely to stay the course and continue saving for them for the long-term.
18. Keep your eye on the prize.
Staying focused on your goals take discipline and determination. Saving can be easy and exciting at first, but after a while you may lose that initial motivation and start to find other things you can spend that money on. To avoid veering off course, check in with your goals regularly and keep your eye on the prize.
19. Track your progress
People in the U.S. save only 5.5% of their money compared to the 20% that personal finance teaches that you should put away. But instead of feeling ashamed about your lack of savings, just start by saving something. Even 1% is better than nothing. Track your progress and continue to increase the number year after year. Step by step, day by day, you can get to that 20% savings level. The truth is there are many ways to save money. Find the ways that work for you and slowly start incorporating the strategies into your life.
What tricks do you have for saving money?
Brittney Castro is the Founder & CEO of Financially Wise Women, an LA-based financial planning firm for women. Brittney has been featured in the Wall Street Journal, New York Times, CNBC, Glamour.com, KTLA, Entrepreneur.com, CBS, and more. Away from the office, you can find Brittney working out, drinking coffee with steamed almond milk, reading, playing with her fur baby Arya, and, of course, dancing. Follow her at @brittneycastro.