SmartMoney: Bringing Home the Bacon on my Own Terms
Today we have a guest poster - Sarah from Instructions Optional is popping by to share her personal finance story with us. Here is a bit about Sarah:
Sarah Long is a stay-at-home, homeschooling mom who manages a full-time career from the comforts of her own home. A consummate writer who loves to write about the delicate balance of family, home and career, you can find more of her writing at www.instructionsoptional.com.
Bringing Home the Bacon on My Own Terms by Sarah
After I graduated from college, I fancifully thought that I would be able to go out and find the perfect job, one that paid all of my bills while still allowing me the opportunity to spend as much time with my children as I had been able to while in college. I soon learned, however, that this was simply not going to happen. I have an English degree, and aside from suspicious-sounding work-from-home schemes, my only other option involved traveling to an office and working for eight (or more) hours, while leaving my children with a babysitter all day.
Throughout my senior year, I worked nights at a bar, which left my days free for school and kids, and this job lasted for a little while, but the recession inevitably caught up with me, and I suddenly found myself without a job at all. Even though it went against my personal philosophy, I started pounding the pavement looking for a 9 to 5 job, and interviewing babysitters.
However, much to my dismay, I was simply unable to land a job, regardless of the concessions I was willing to make in my home life. I scoured the employment ads and looked for work anywhere I could find it, regardless of hours, pay, etc. After five years of college, I have to admit that it felt a little demeaning to apply for some of the jobs that I did, but I have children to care for, and their needs trumped the demands of my ego.
After six months, still nothing. It was at this time that I heard of a local modeling studio that was hiring freelance models. After I was hired, I was informed that I would be an independent contractor.I was unfamiliar with this term, so I dove into my research. What I discovered was that I would be responsible for paying my own taxes, not only on my earnings, but also for Social Security and Medicaid (known as the Self-Employment Tax). This seemed like a very daunting prospect to me, and I almost turned down the position, but after a little more research, I decided to start my own business.
Many employers offer 1099s at the end of the year, which is a summary statement of all of your earnings through them; this is only required when they have paid you more than $600 for the year, and not everyone chooses to send out these statements, so be aware what your potential employer’s standards are. If they opt out of sending out 1099s at the end of the year (as the modeling studio did), it is up to you to keep accurate records of your earnings. I chose to create a spreadsheet, which was a simple way to document everything.
Another thing to be aware of is that, as an independent contractor, you are eligible for many tax deductions. These include, but are not limited to: home office supplies, entertainment and meal expenses (as long as business is being conducted), advertising and promotional expenses, and mileage (for business purposes only, not commuting). I bought a cell phone and used that telephone number for business purposes only, so I was able to write that off as well, along with my monthly bill. The key is to keep all of your receipts, which can become overwhelming after a while. My simple solution was to buy an accordion file and immediately stow any receipts therein for safe keeping. I also took the time to write the amount on the receipt in ink, along with a brief description of what was bought, in the event that the receipt faded over time.
A friend of mine, who owns his own business, warned me before I started that I should anticipate what my taxes would be and save throughout the year, so I wouldn’t be faced with a large bill at tax time. I learned that it is recommended that independent contractors set aside approximately 10% of their earnings for the Self-Employment Tax (although it usually doesn’t require that much). I found a page on the IRS website where approximate taxes for annual earnings were listed, and I bookmarked that for later use, when I would be a little more certain of what my annual earnings would be. I haven’t yet set up a business checking account, but I plan to do that soon, which will make saving for taxes easier.
After my tax concerns had been addressed, I sat down and listed all of my marketable skills, and affixed a price to them. This involved researching my competition, and using simple common sense. Whereas someone who had been involved in this business for many years may be able to charge a higher rate, I knew that I had to start low (but not too low) and work my way up.
Once I had this basic research done, I started to let everyone know that I was open for business. In addition to the modeling, I also touted myself as a freelance writer, editor, typist, desktop publisher, and anything else that I could think of. I started with word-of-mouth, but I eventually saved up enough money to contact a flyer printing company, which produced glossy, full-color flyers that I hung up all around town. This was something I initially thought
I could do on my own computer, but I have to admit that it was worth the money, as my colorful flyers popped out alongside the faded black and white fliers around it.
While modeling work was fairly regular, I was disappointed at the seeming lack of interest in my other services. It dawned on me that this could be because my qualifications for modeling were easily apparent, while my writing and computer skills were a little more difficult to prove. So, I started offering my services for free in order to showcase my talents. My only stipulation was that they repay me by bringing new clients my way.
I started by creating a menu for a local restaurant for free, and this lead to a couple of other small jobs. I frequently visited blogs and offered to write blogs for free, which lead to a couple of paying freelance writing offers. I proofread and typed a couple of friends’ term papers, and they in turn sent a few of their classmates my way, who were willing to pay a reasonable fee. I considered everything I did during this period to be shameless self-promotion, and I have to admit that it was a little discouraging at times,
but I eventually was able to start charging for the majority of the work I did.
My bills are now back to being paid on a regular basis, and I am at home with my children. Truthfully, there are days when I wonder what my life would be like, had I been hired at any of the nameless companies that I applied to, but I don’t wonder for very long. After all, there’s work to be done and children to spend time with. In the end, that’s all that matters.
By TwitterButtons.com
Sarah Long is a stay-at-home, homeschooling mom who manages a full-time career from the comforts of her own home. A consummate writer who loves to write about the delicate balance of family, home and career, you can find more of her writing at www.instructionsoptional.com.
Bringing Home the Bacon on My Own Terms by Sarah
After I graduated from college, I fancifully thought that I would be able to go out and find the perfect job, one that paid all of my bills while still allowing me the opportunity to spend as much time with my children as I had been able to while in college. I soon learned, however, that this was simply not going to happen. I have an English degree, and aside from suspicious-sounding work-from-home schemes, my only other option involved traveling to an office and working for eight (or more) hours, while leaving my children with a babysitter all day.
Throughout my senior year, I worked nights at a bar, which left my days free for school and kids, and this job lasted for a little while, but the recession inevitably caught up with me, and I suddenly found myself without a job at all. Even though it went against my personal philosophy, I started pounding the pavement looking for a 9 to 5 job, and interviewing babysitters.
However, much to my dismay, I was simply unable to land a job, regardless of the concessions I was willing to make in my home life. I scoured the employment ads and looked for work anywhere I could find it, regardless of hours, pay, etc. After five years of college, I have to admit that it felt a little demeaning to apply for some of the jobs that I did, but I have children to care for, and their needs trumped the demands of my ego.
After six months, still nothing. It was at this time that I heard of a local modeling studio that was hiring freelance models. After I was hired, I was informed that I would be an independent contractor.I was unfamiliar with this term, so I dove into my research. What I discovered was that I would be responsible for paying my own taxes, not only on my earnings, but also for Social Security and Medicaid (known as the Self-Employment Tax). This seemed like a very daunting prospect to me, and I almost turned down the position, but after a little more research, I decided to start my own business.
Many employers offer 1099s at the end of the year, which is a summary statement of all of your earnings through them; this is only required when they have paid you more than $600 for the year, and not everyone chooses to send out these statements, so be aware what your potential employer’s standards are. If they opt out of sending out 1099s at the end of the year (as the modeling studio did), it is up to you to keep accurate records of your earnings. I chose to create a spreadsheet, which was a simple way to document everything.
Another thing to be aware of is that, as an independent contractor, you are eligible for many tax deductions. These include, but are not limited to: home office supplies, entertainment and meal expenses (as long as business is being conducted), advertising and promotional expenses, and mileage (for business purposes only, not commuting). I bought a cell phone and used that telephone number for business purposes only, so I was able to write that off as well, along with my monthly bill. The key is to keep all of your receipts, which can become overwhelming after a while. My simple solution was to buy an accordion file and immediately stow any receipts therein for safe keeping. I also took the time to write the amount on the receipt in ink, along with a brief description of what was bought, in the event that the receipt faded over time.
A friend of mine, who owns his own business, warned me before I started that I should anticipate what my taxes would be and save throughout the year, so I wouldn’t be faced with a large bill at tax time. I learned that it is recommended that independent contractors set aside approximately 10% of their earnings for the Self-Employment Tax (although it usually doesn’t require that much). I found a page on the IRS website where approximate taxes for annual earnings were listed, and I bookmarked that for later use, when I would be a little more certain of what my annual earnings would be. I haven’t yet set up a business checking account, but I plan to do that soon, which will make saving for taxes easier.
After my tax concerns had been addressed, I sat down and listed all of my marketable skills, and affixed a price to them. This involved researching my competition, and using simple common sense. Whereas someone who had been involved in this business for many years may be able to charge a higher rate, I knew that I had to start low (but not too low) and work my way up.
Once I had this basic research done, I started to let everyone know that I was open for business. In addition to the modeling, I also touted myself as a freelance writer, editor, typist, desktop publisher, and anything else that I could think of. I started with word-of-mouth, but I eventually saved up enough money to contact a flyer printing company, which produced glossy, full-color flyers that I hung up all around town. This was something I initially thought
I could do on my own computer, but I have to admit that it was worth the money, as my colorful flyers popped out alongside the faded black and white fliers around it.
While modeling work was fairly regular, I was disappointed at the seeming lack of interest in my other services. It dawned on me that this could be because my qualifications for modeling were easily apparent, while my writing and computer skills were a little more difficult to prove. So, I started offering my services for free in order to showcase my talents. My only stipulation was that they repay me by bringing new clients my way.
I started by creating a menu for a local restaurant for free, and this lead to a couple of other small jobs. I frequently visited blogs and offered to write blogs for free, which lead to a couple of paying freelance writing offers. I proofread and typed a couple of friends’ term papers, and they in turn sent a few of their classmates my way, who were willing to pay a reasonable fee. I considered everything I did during this period to be shameless self-promotion, and I have to admit that it was a little discouraging at times,
but I eventually was able to start charging for the majority of the work I did.
My bills are now back to being paid on a regular basis, and I am at home with my children. Truthfully, there are days when I wonder what my life would be like, had I been hired at any of the nameless companies that I applied to, but I don’t wonder for very long. After all, there’s work to be done and children to spend time with. In the end, that’s all that matters.
By TwitterButtons.com 
