- Manage income instability – Short-term savings can remove the stress of living invoice to invoice. Having savings can empower you to accept the jobs you want and navigate delayed payments in stride.
- Prepare for emergencies – A rainy-day fund is critical to cover those unexpected emergencies that might pop up in your life—car repairs, medical bills, unplanned travel costs, and unexpected business expenses. It’s a good idea to save 5% of your after-tax income, but you may want to start with a goal of $1,000.
- Save for goals – With all the tasks that come with running your own business, goals can fall by the wayside. Intentionally setting and saving for short-term priorities like a vacation, a wedding, or an industry conference may help make sure that they happen.
- Short-term savings when you’re self-employed can help you manage income stability, prepare for emergencies, save for goals, and take time off.
- Set aside a little extra savings, if possible, so you can take the time off you need without worrying about lost income.