How to manage your joint finances as a freelancer who is married
We all know that personal finances can get seriously complicated at the best of times. Throw into the mix the fact that you are sharing your financial landscape with a spouse and that can take things to another level altogether.
You will often need the guidance of family lawyers to help create a financial framework that you are both comfortable with when it comes to sorting out the big decisions.
But what about on a day-to-day basis, especially if you are a freelancer with a variable income?
Here are some pointers on how you can manage your joint finances.
Dealing with taxes
One of the most challenging aspects of being a freelancer is making sure you keep on top of your taxes and account for everything properly.
It is quite common for a couple to have different tax scenarios to contend with. One of you might be employed and your taxes are deducted at source from your pay, while the other works freelance and has to file taxes periodically when deadlines come around.
It is often a good idea to have a safety buffer when it comes to calculating how much in tax you have to pay on your income after expenses.
A good way to achieve that aim would be to look at ringfencing about 25% of the household income for taxes so that you both know that a certain percentage of your joint income is not available for daily expenses.
Having this discipline to set aside tax money is essential If you have a joint account where all of your income goes.
Keep track of your expenses
Another real challenge is keeping track of expenses that can be allocated to your freelance business and what classes as personal expenditure.
A great way of separating these out would be to create a spreadsheet with various categories so that you can easily input the information as you go along and then extract accurate details when the time comes to calculate your taxes.
Simply mark each business expense and the spreadsheet will make it easy to see how much you have spent and save a lot of hassle trying to work your way through receipts at a later date.
Keep your savings separate
A good failsafe if you are concerned about money in your joint account getting spent that should be going towards your taxes would be to open a savings account that is specifically for your taxes.
If you have been freelancing for a while you probably have a good idea of what sort of income you are likely to be getting and how much tax you are going to have to pay.
One way of making sure you keep on top of your finances would be to set up a regular monthly payment from your joint account into the savings account. That way you can be sure that you are building up a pot of cash that you know is for the business part of your joint finances.
Managing your finances as a married freelancer takes a bit of extra care and attention to get it right but you have all the tools at your disposal to make the task as painless as possible.
