Making the leap from traditional employee to solopreneur involves a number of decisions and considerations that may come as a surprise if you’ve always been on someone else’s payroll. Being Numero uno for every part of your solo business can highlight how complicated it can be to keep any business running.
Unfortunately, becoming a solopreneur can also complicate your personal financial choices. That’s because money habits that seemed harmless while you were on a biweekly pay schedule can cause financial chaos on an irregular income.
Whether you’re considering becoming a solo entrepreneur or have been shaking up the solo business world for a while, make sure you don’t bring these common salary habits with you into your venture.
Ignoring your bank balance
Before becoming a teacher, I had a series of low-paying jobs, including several periods where I cobbled together multiple part-time jobs. During that period of what we might generously call my “early career,” it was my habit to check my bank balance daily.
This was the early 2000s, when the Internet still required a kerosene modem to access Google, so it took me some effort to give in to this habit. But because I made so little money, I had to know what was happening in my account almost every day to make sure I hadn’t missed anything.
When I started teaching and was bringing in the average income, it was a relief to only check my bank balance when I paid my bills, rather than every day.
As a public school teacher, I knew exactly how much money I received in each paycheck, I knew exactly when my account would be cleared, and I knew that if my paycheck mental accounting was a bit off, I didn’t have to wait long for the next paycheck. (Ironically, the only time I ever overdid my account was during my normal salary years.)
Make friends with your banking instruments
Becoming a solopreneur is a bit like returning to your career in your early twenties, at least financially. Keeping an eye on your finances is the only way to stay ahead of problems before they get out of hand. There is no fixed salary smooth out any problems.
The good news is that banking technology has come a long way since I had to keep my bank The modem’s kerosene tank is full just to log in to the internet. These days, virtually every bank and credit union under the sun has an app that lets you set up personalized alerts and text message notifications, among other things.
This makes it really easy to check your bank balance regularly, whether you set an alert to notify you when your balance drops below a certain dollar amount, or you have your bank text you the current balance at the same time every day.
Waiting for tax season
Paying taxes is not a fun time for anyone, but when you work for a salary, the tax authorities come knocking at least once a year.
Whether you use a CPA or do it yourself, taxes are fairly straightforward for those who practice traditionally. Once you have your W-2 in hand, you can usually get started sometime in early spring and then wait patiently for your tax refund to arrive. . . and you’re done until next year.
But solo entrepreneurs don’t get the luxury of treating taxes like a shitty annual vacation. Because small business owners do not have taxes withheld from their income, they must pay an estimated tax every quarter, with each payment submitted through the form 1040-ES. The estimated due dates for each payment are as follows, but these may be delayed if the 15th falls on a weekend or holiday.
- First quarter (January 1 – March 31) Two April 15
- Second quarter (April 1 – May 31) Released June 15 (June 16, 2026)
- Third quarter (June 1 – August 31) Published on September 15
- Fourth quarter (September 1 – December 31) Due on January 15th
Solo business owners also typically face much more complicated tax reporting when they have multiple clients. That means they fill out more tax forms – such as 1099-NEC and 1099-K forms – than traditional employees.
Build tax infrastructure into your business
Paying and organizing taxes for solo businesses is overwhelming if you only think about it when there is a due date. But they can be a simple part of your daily routine if you build tax infrastructure into your business plan.
For quarterly estimated taxes, it starts with planning ahead for paying Uncle Sam. You can do this by creating a savings account, where you transfer approximately 20% of each payment you receive. This ensures you always have the money you need to pay your estimated taxes every quarter, so you don’t have to find the money every three months. Over time, you can adjust how much you set aside for taxes if necessary.
As for organizing your taxes, this can also be a relatively simple and ongoing part of the way you do business.
It’s important that solo entrepreneurs have an accurate record of their income because there’s always the possibility that a customer could make a mistake with the 1099 number they issue. A billing structure where you record revenue from specific customers while simultaneously marking their invoices as paid can be a small adjustment that makes tax organization much easier. This can be as simple as a Google Sheet that keeps you up to date, as long as you are consistent.
Do not take vacation days
When you have a traditional job, it can be easy to forget to take time off. Whether you get a set number of vacation days per year, or your workplace offers unlimited PTO (which really means you get a hairy eyeball trying to schedule it), it’s easy to get to the end of December before realizing you never took a vacation.
This is clearly a serious problem within the American workforce, which is suffering from burnout, lack of work boundaries, and a bad case of Monday.
While none of that is good, many workplaces at least offer regular time off in the form of weekends and federal holidays. Employees who typically leave their vacation days unused can still count on several long weekends and other breaks throughout the year to give them the necessary opportunity to rest.
Block time for rest
Working for yourself means you don’t have to stick to a 9-to-5 schedule, but it also means you might be working at midnight, on weekends, and through Thanksgiving dinner. The habit of working without vacation can be especially tempting if your success or failure depends on your busyness.
But you are now solely responsible for your business, including the well-being of your only employee. You can’t rely on the holiday calendar to give you time away from work like you did as a paycheck. You have to set boundaries – or deal with the consequences of burnout. This could mean that you can no longer work at all.
That’s why you need to set the boundaries that your previous schedule automatically gave you. You can do this by making time for rest weekly, monthly and annually. Imagine that your rest periods are legally required, so that you are not tempted to continue working during your vacation.
Build better habits
Working for yourself not only requires a change in the way you structure your workday; you may also need to reconsider your personal financial habits.
Without the safety net of a stable salary, solo entrepreneurs can’t afford to ignore their bank balance like they did as employees. Your bank’s mobile app and online tools can help you keep track of your finances with automated alerts and notifications.
While salaried employees come to view taxes as one season of the year, solopreneurs have to deal with tax chores all year round. That includes paying quarterly taxes and keeping records organized. Setting aside about 20% of each payment can help solo entrepreneurs have the money they need to pay their estimated taxes each quarter, while recording their income as soon as bills are paid can make tax filing easier come April.
And while all Americans need to take more time off, those with traditional jobs can often count on weekends and federal holidays even if they forget to use their PTO. Solopreneurs can get stuck in an endless work cycle unless they specifically block out regular time for rest—and pay close attention to it.
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