Without a shadow of a doubt, one of the worst mistakes for the newly self-employed is to not keep track of expenses. You may think it’s something trivial. Or worse, you know it’s important but it’s too boring for you to focus on. But then the end of the year comes and you have that “oh no…” moment because one of two possibilities dawns on you: 1) either you have to sift through a drawer full of receipts and you have to spend days organizing them or 2) you never even kept receipts and you don’t know where to start. Believe me, many of us have been there (including this guy). When you’re self-employed, you need to be obsessed about keeping track of expenses. So if you don’t want to make your life miserable come tax season, this article is for you.
The good news is that keeping track of expenses as a self-employed professional doesn’t have to be hard. In fact, not only is it easy, it also doesn’t require a lot of time. It only becomes a burden if you let it become one. This article from Nora Dunn on WiseBread breaks down a simple 5-step process for keeping track of expenses when you’re self-employed. By the end of it you’ll realize how routine of a task you can turn it into. Best of all, Nora shares some horror stories of when happens to freelancers who fail to keep track of their expenses.
Speaking from personal experience, this is definitely a mistake I made when I first started off. I do not intend to make the same mistake again. If someone were to ask me what my top pieces advice would be for aspiring freelancers, keeping track of expenses would be in my top 2. It’s that important. So go ahead and read the tips, you’ll thank me later.