Saving Money When You’re Self-Employed: A Guide

Being self-employed comes with dozens of benefits. You can create your own work and choose when you do it. You’re your own manager, which means no answering to people higher up. And you can set your level of ambitions to suit your needs – deciding to grow or simply maintain your business activity each month.

Yet it’s also difficult to save money when you’re self-employed, and often you’ll find that your outgoings are so high that your incomings barely cover them. Here’s how to save cash as a self-employed individual in 2022.


When you’re earning money, all that you don’t spend on your work can be called profits. The cash that you spend in order to maintain your profitable endeavors is called your overheads, and that’s what you’ll want to focus on when you’re looking to save cash. Every sole trader, freelancer, and self-employed individual will have a different set of overheads. Still, there are general parts of your spending that you might be able to reduce:

  • Bills. You may pay these in your home office or in an established office. See if you can bring these down by bargaining with energy or internal providers.
  • Rent. If you’re renting an office space that you don’t necessarily need, this is a smart thing to cut out of your working life to save a good deal of cash.
  • Materials. Many self-employed people need high-powered laptops in order to work. Find cost-effective and long-lasting hardware in order to save cash in the long run.
  • Subscriptions. You’ll also likely be subscribed to a number of tech products and software solutions. Do you need them all? Cut out those that you don’t need to save cash.

The list, of course, goes on – and there will be aspects to your overheads that are specific to your lifestyle or vocation. You’ll know what they are and whether they’re absolutely essential to the functioning of your business.

Tax Calculations

Another unique quality to the life of self-employed individuals is their relationship with tax. You’ll pay tax at the end of the year rather than in installments from your paycheque. That means that you need to operate on a spending strategy that keeps some cash in reserve for when the taxman comes knocking. It also means that you have to manage your tax affairs yourself, including ensuring that you are compliant with Making Tax Digital for the self-employed.

Happily, there are some ways in which you can save on tax as a self-employed worker. Examine this list of things you can claim back from your tax receipts in order to reduce the amount of cash you’re sending to the taxman each year. Making such claims can help you save cash and reinvest cash more and more in the building up of your business.

Separate Accounts

Many sole traders and self-employed individuals tend to allow their clients to pay their invoices directly to their personal accounts. This is an error, seeing as it muddies the waters between what you’re spending on your business and what you’re spending on yourself.

If you’re serious about saving money, you should have at least two separate accounts: a business account where you accept cash from customers and clients and spend on the maintenance of your business, and a personal one to which you receive lump sums from your business account to spend on your lifestyle.

Achieving this degree of separation will help you to understand where your business is losing money and where it’s your spending habits that are dragging your finances down. So do get yourself a business account as soon as you can. With separate accounts, you can also begin to look at your personal spending habits in order to save money there, too.

Personal Spending

As well as looking at your business overheads, you should also look at just what it is that you’re spending cash on for leisure and lifestyle reasons. Now, the advice here isn’t to be frugal – everyone deserves to spend their wages on the things they love. Instead, it’s to take a look at your spending data in your personal account in order to unearth poor habits that may be costing you money. You should look out for:

  • Subscriptions that you’re no longer accessing, which you should cancel immediately.
  • Small things, like your daily coffee, which are adding up to hundreds of dollars of spending. Why not switch to a coffee made at home?
  • Large spending sprees and periods of retail therapy that drain your earnings.
  • Suspicious activity in your account that you cannot explain. If you find this, contact your bank immediately.

You can also do a more stringent budgeting and bookkeeping overview of your personal spending.


You budget in order to save money. You can save money in order to reinvest more in your business in the hopes that it’ll generate more profits in the future for you to enjoy. Or you can budget to get out of debt or to accrue savings that you may one day spend on a house. Budgeting essentially means finding ways to spend as little as possible without compromising the ideals of your lifestyle. A typical budget might:

  • Set a limit on spending in certain areas, such as retail or nights out. If you exceed that limit across a month, you should stop spending on those pleasures.
  • Look into grouped spending data. For instance, if it turns out that you’re spending hundreds of dollars on delivery food per month, it might be worth considering an alternative way to feed yourself.
  • Look at essential versus luxury purchases. Essential purchases are those that you cannot live without, whereas luxury ones are easy to cut out if you wish to do so.

Because budgeting is so important to those who are self-employed, there are hundreds of guides online that’ll help you set up a responsible budget that you can rely on to save you cash. Search for these in order to help you reach financial stability.

There you have it: some of the ways in which you can save money when you’re working as a self-employed individual.

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