It doesn’t matter if you’re a freelancer or an entrepreneur, a self-employed lifestyle can be fraught with financial peril. The ebbs and flows of income, sudden unexpected expenses, and the need to tend to both business and personal money matters can leave a self-employed person struggling.

Here are a handful of essential money management tips that every self-employed person should have in their professional tool belt.

Approach Your Budget Seriously

Everyone talks about a budget. However, you don’t just need a general budget — as a self-employed person, you need to take your budget very seriously.

Use your budget to enable you to live below your means. This will help you weather any temporary reduction in income. Also, plan consistent times to update and adjust your budget so that it remains relevant to your lifestyle.

Separate Business and Personal Finances

From bank accounts to budgets to investments, try to keep every aspect of your professional finances separate from your personal life. This makes it much easier to calculate taxes, make money decisions, and so on.

Save Emergency Funds

The self-employed lifestyle is filled with uncertainty. And the truth is, that doesn’t have to be a bad thing. It adds to the sense of adventure — at least when it’s handled properly.

Rather than reacting to each financial shortfall, try to get ahead of the curve by saving up emergency funds to offset future struggles. Create a fund to help keep your business going when money isn’t coming in. Also save a personal chunk of change to keep you afloat when money is tight or surprise expenses crop up, like buying a new car or covering the costs of purchasing a new home.

Be Proactive and Set Routines

Self-employed people serve their financial interests best when they are proactive. This includes things like:

  • Setting aside and paying taxes on time — both for you and your business.
  • Creating reminders and setting up autopay to ensure that you’re paying all of your bills on time.
  • Tackling things like home repair and car maintenance before they lead to larger financial issues.

By having routines and proactive activities in place, you can retain a sense of control and predictability about your finances.

Set Goals

Finally, take the time to set both short- and long-term goals for yourself and your company. This can help you maintain momentum as you manage your finances. Short-term goals can consist of things like budgets and emergency funds.

Long-term goals should tackle tricky, easy-to-ignore items like retirement. This one, in particular, is an important concept that even full-time employees struggle to prioritize. For traditional employment, this usually comes in the form of a 401(k). However, as a self-employed individual, you’ll need to take matters into your own hands. You can do this by setting up an IRA, rolling over old 401(k)s, and generally setting yourself up to save for your retirement.

Whether it’s retirement, saving for your kid’s college, or anything else, long-term goals give you financial guidelines to keep you on track.

Managing Your Money

From business owners to gig workers, there are millions of individuals managing their money all on their own. While this can be financially positive at times, it can also have its darker moments. Use the tips above to help prepare yourself to overcome the negative events whenever they take place. That way both you and your business can survive and thrive far into the future.

Beau Peters is a freelance writer from the Pacific Northwest with a passion for purpose-driven business content.