Comments on: My “New” Monthly Paycheck

By: J. Money

J. Money — Fri, 13 May 2011 15:32:09 +0000

Totally! And thanks ;) You know, it’s funny too – I actually now some PF bloggers who make decent money from blogging but actually aren’t good at keeping their advertising and stuff straight. Like, they could be making even more if they just organized what they already have better! I think once you get that squared up, you can focus more on growing the business too. Here’s to success!

By: Antonina Geer

Antonina Geer — Fri, 13 May 2011 13:24:40 +0000

Great post! It’s great to read how you’ve started to implement what works for you. I like to tell entrepreneurs, especially those in internet marketing and blogging that the key to financial success in business is being organized with the financials. The number one key to starting that is keeping the personal and business stuff separate! It helps the solopreneur to keep track of what’s going in their businesses and allows for better decision making. Additionally, it keeps you in compliance with the IRS and shows that you are a serious business owner.

Having a system and process in place like you’ve done is very important! Also having a budget that determines the amount to pay yourself and the amount to put in savings for taxes is critical!

Loved this post!

By: J. Money

J. Money — Thu, 12 May 2011 00:40:26 +0000

@Jenna, Adaptu Community Manager - Thanks for reading about my new monthly paycheck plan ;) @retirebyforty - Go for it! But be sure to talk to a few people first to make sure it make sense for you. I know others who've created them when it wasn't necessary. @Jen - Cool! LOVE that name too, haha... will go over after posting this and check it out :) @Carolyn - Yup! All good points. In fact, originally I thought that's exactly what I'd be doing. Receiving money, paying for my expenses, then dividing up the profit between myself and the tax man. After talking to my accountant though, and larning more about quarterly taxes, she said might be worth trying to estimate what I'd bring in and then divide taxes by 4 and pay them throughout the year so you know what to expect. So for now that's what I'm trying out :) But we'll see how off I was by the end of the year! (and I'll revisit too if I get major increases or decreases in income at any point) @Financial Samurai - Thanks dude :) Wanna share with us how you're currently set up? @Jeffrey Trull - Cool! Glad you find it helpful! @Ashley @ Money Talks - Yeah, maybe one day I'll try that if I ever fullfil my desire to be bartender! I swear one day I am :) @Sam - See my post today ;) Is a Dream Job worth it if you can't save any money? @Paula @ AffordAnything.org - Haha... I like how you say "real" company ;) I say that all the time too - def. different than companies back in the day with real employees! @Debbie Beardsley - Hey, whatever works and keeps you rolling smoothly! Hope you're having a good week so far, friend :)

By: Debbie Beardsley

Debbie Beardsley — Wed, 11 May 2011 18:26:19 +0000

I think setting up a paycheck is very important when you are self employed. I like your idea and will be implementing it. I don’t have a separate account for my tax accrual, I enter it into quicken as a misc expenditure until I actually write the check.

By: Paula @ AffordAnything.org

Paula @ AffordAnything.org — Wed, 11 May 2011 03:15:52 +0000

I like this method. My dad owns and runs a “real” small business (like, with employees!) and he pays himself a salary from that business, so why shouldn’t a solo entrepreneur like myself and J. Money (I keep good company!) do the same?

By: Sam

Sam — Wed, 11 May 2011 00:08:26 +0000

J, just realized, where’s the line item for saving/investing?

By: Ashley @ Money Talks

Ashley @ Money Talks — Tue, 10 May 2011 20:09:19 +0000

That’s pretty much what we did too when we were in your situation. I would pay myself a regular salary every two weeks when I paid our employees. Then every couple months I would take a lump sum as money built up in the account.

Also on the getting paid every day when working for tips. I did exactly what Katie did and have been living on the “one month ahead” system ever since. It’s so nice.

By: Jeffrey Trull

Jeffrey Trull — Tue, 10 May 2011 18:33:06 +0000

This makes so much sense I’m not sure how it didn’t occur to me before! I’ll definitely use this when I get to your point.

By: Financial Samurai

Financial Samurai — Tue, 10 May 2011 17:56:21 +0000

Sounds logical to me man! I think if you didn’t do it this way, you might risk overspending so it’s good you’ve got this set up!

By: Carolyn

Carolyn — Tue, 10 May 2011 16:43:01 +0000

Welcome to the fold (self-employment, aka no-steady-paycheck). We’ve been doing approximately the same thing, but with separate accounts for each of our businesses. (My husband has one, I have … kind of … two.)

I’m interested in how you came up with that amount for taxes. Your taxable income will be reduced by your business expenses, so you may find yourself switching to a percentage method of saving for taxes at some point.

It’s easier with some businesses: You collect the money, you buy materials, pay contractors, etc. for the job, you take a portion of what’s left over and save it for taxes, you pay yourself, you leave some in the account to cover incidental business expenses.

With some businesses, you really don’t have expenses directly related to one job, so it’s harder to figure on a monthly basis. The important thing, though, is that you leave some money in that business account to pay for them. (Examples: printer, ink, hosting, client lunches… :) )