If you are self employed, you manage everything. Now, this might be a bit of an over simplification, but this basically boils down to task lists and income profiles. I remember that as an employed person, the only thing that I had to remember was that my income would arrive on the 15th of the month – sometimes as early as the 13th (whenever this was a Friday funnily enough)! So I arranged my most important direct debits, mortgage, council tax, sky subscription(!) to come out before the 20th. And I did my socialising around the same time of the month – in the 2 weeks after payday. That was it, job done. Well almost, because very quickly I had to build in things like credit card payments, as I had borrowed on them to tide me over after the last batch of direct debits had gone out around the 1st of the month. Just the simple expedient of writing things down, knowing that 50% of my salary (after tax) would be gone in the week after payday, that another 25% would go out around 2 weeks before payday and that the remaining 25% to buy food and go out etc would have to be spread out over the full month. Simple? Well yes, but did I do it? Mmm, as the reference to my credit card would illustrate, no I bloody didn’t.
Work was a similar story. I remember as a project manager we had monthly team meetings which doubled as progress reports. We’d all be at there in a semi circle, with our manager in the middle at the front. We’d go through all of our projects, and would have to give updates on how things were going. Despite knowing a full month in advance of this meeting, I would have done nothing but the bare minimum until a week before this meeting. This brings another theme here, that of negative motivation, but that’s another article for you to read.
The week before this meeting would have been a whirlwind of rushing around trying to get things done – unfortunately, quite a few of these things had to be done by other people, so at our progress meeting, I’d be sat there defending myself, saying things like ‘such-and-such-a-body hasn’t been able to complete task x, so I can’t report progress here and now’, or ‘contractor z has only just started task y so I won’t have anymore news until next month’ and so on. I’d then have to spend the next week, frantically tidying all of these loose ends and then relax for a couple of weeks. And the number of times that AN Other got me out of a hole, well…
The Buck Stops Here
When you are self employed, this doesn’t work – the buck stops with you. For a kick-off, there’s not necessarily a regular monthly income – even though your bills will still go out, as regular as clockwork. So you need to manage your income and outgoings. Stagger your direct debits across the month, giving yourself space to make up any income gaps. Use the fact that there are four weeks (minimum) in any given month and have things go out on the 1st, 8th, 15th and 22nd. Then schedule your income (and hence task list) around this – allowing time for cheques to clear or late payment from customers etc.
Then of course, you will need to play this out over the longer period. Unexpected things will happen, so you need some form of contingency fund. Also, never mind making Jack a dull boy, all work and no play is a recipe for burn out, so schedule time off. This means managing your money so that you can afford the time off. Annual events such as Christmas, your wife’s birthday(!) need to be planned and accounted for, both in terms of time and money. So do it. NOW!