Financial tips for first-time freelancers
Thinking of going the do-it-yourself route? Here’s what you need to know.
1. Don’t ditch the benefits
You may be eligible for medical, dental and life/disability insurance through a professional association’s insurance partners or a spouse/partner’s employer.
2. Set up a contingency fund
Your cash flow will likely be more unpredictable so build a financial cushion to fall back on during any slow periods – consider a Tax-Free Savings Account.
3. Pay the taxman
Put aside a portion of your earnings to pay income tax and GST (if applicable) – you may pay annually in the first year then move to quarterly instalments if you exceed your province’s net tax owing threshold.
4. Deductible expenses
Be sure to keep all business expense receipts – if you’re working from home, the portion of your household expenses related to the workspace may be deductible from your business income for tax purposes.
Be prepared to adjust your spending habits (e.g., vacations may have to wait until your business is established), especially during the critical start-up period.
1. Consider your options now
Would you retire early, go back to school, look for another job or maybe start a business?
2. Research government programs
Determining your next step may be easier if you qualify for educational or financial assistance.
3. Put money aside
Even if you never use it to replace income, an emergency reserve will help you more easily manage any major life change.
Connect with an IG advisor to uncover your personal financial goals, and how you can achieve them.