A person who is self-employed becomes their own boss as they do not work for a particular company and receive a salary from the company where they work (source: Investopedia). Examples of self-employment are those who own and run their own businesses (such as opening a restaurant, clothing store and selling online). Freelancers, even though they receive payment from clients, can also be categorized as a specific type of self-employment (source: Knowadays).
Being self-employed is exciting. Those who run their own businesses or work freelance can also manage their own work time as they are not bound by company rules. However, there are a number of hidden costs that need to be considered. Read on to find out what big expenses you need to prepare money for and how to be jago at managing your finances.
Big Expenses that Self-Employed Must Prepare for
Being self-employed or a freelancer, what big expenses do you think you have to prepare money for?
1. Savings just in case income fluctuates
Even though it offers many benefits, self-employment does not promise consistent income every month. The amount of income you earn can change, up or down. If you run a clothing store, for example, purchases will increase towards Eid or the end of the year. However, in other months there may be fewer buyers. For those who work as freelancers, income depends on the number of projects.
Therefore, apart from having skills in managing finances well, self-employed people should have savings just in case. These savings can be used to meet daily needs when income drops drastically.
2. Maintenance costs
Running your own business is closely related to preparing money to pay maintenance costs, such as maintaining the tools and machines used. Likewise for those of you who are freelancers. You have to buy the equipment you need to support your work yourself.
When equipment has problems, is damaged or needs to be upgraded, you are the one who has to bear the costs. So, make sure you save money for maintenance.
3. Health insurance and retirement funds
When working for a company, you may get health insurance as part of the benefits offered. Likewise with retirement funds. Or, the company contributes part and you the other part. Even though the types of insurance and retirement fund schemes offered are varied, at least you won't have to pay for everything yourself.
This is certainly different when you have your own business or work freelance. You have to buy your own health insurance and build your own retirement funds without company contributions.
4. When you are sick or on holiday
When working for a company, you have the right to enjoy leave and still receive your full salary. However, it's different when you run your own business or are not a company employee.
If you don't work, then you don't get income. For example, when you are sick or going on holiday. If it's only a few days, that's fine. But, you need to consider when you take days off for any reason for a long time. Where will you get your income from?
This example is similar to the possibility of unsteady income as discussed in the first point. You can reduce expenses and prepare savings by managing your finances better. It is very important to have a back-up plan to cover the amount of income lost while not working.
How to Manage Your Finances the Way You Want in the Jago application For Business Owners and Freelancers
There are several ways to manage your finances that you can do using just one application, the Jago application.
1. Use the Jago Pocket to manage expenses and savings easily
After downloading the Jago application and registering for a Jago account, you can create Jago Pockets right away, a lot of them. And, creating a new Jago Pocket is the same as opening a new bank account. Each Pocket has its own account number.
By creating Jago Pockets in the quantity you need, it will be easier to manage your finances and allocate your budget. So it is more practical when you have to separate various expenses and have several savings for different financial goals. The budget for paying health insurance and the budget for retirement savings can be separated into two different Jago Pockets.
2. Use the Jago Pocket to separate personal and business finances
Dozens of Jago Pockets that can be created make it easier for you to separate your personal and business finances. For example, managing business profits, separating business bills and personal bills, building business emergency funds and family emergency funds in different Pockets, and much more.
3. Take advantage of the Jago Term Deposit and ecosystem to access various investment options to grow your personal savings and business idle funds
To grow your personal savings and business idle funds, you can save them in the form of deposits. The Jago Term Deposit offers competitive interests and an automatic renewal option when due. Apart from that, you can open and withdraw your Jago Deposits at any time directly from the Jago application.
You can also earn profits by investing your savings and idle funds with the Jago ecosystem. Buying mutual fund products at Bibit and investing in stocks at Stockbit are seamless through Jago.
Link your Jago account and Bibit account to invest without top-up fees and without switching applications. Monitor the investment portfolio from the Bibit Pockets in the Jago application.
Enjoy the ease of buying and selling stocks using Jago RDN via the Stockbit application. Top up your Jago RDN directly from the JagoPocket and get interest on the balance that has been added to your RDN. The RDN pocket will also appear and can be seen in the Jago application.
