self-employment

The Straight Talk on Working From Home

Tara Struyk — Tue, 05 Jun 2012 09:36:40 +0000

If you don’t work from home, I’ve got some bad news — it doesn’t involve sleeping in every day, then rolling out of bed to do some work in your PJs. I work from home. Actually, I’m at home, working, right now. No PJs, though. And I’m up at the same time I was when I worked in an office. I think the thing that many people forget about working from home is that regardless of whether you’re sitting at a desk in your home office or typing away on the patio, it’s still working. And, assuming you need to make money (like I do), there won’t be a lot of leisure time. (See also: 10 Productivity Hacks From a Work-at-Home Mom)

If you’re wondering what it’s like to work from home or thinking about making the switch, here are some things to consider.

You’re the Boss

When I tell people I work from home, the response I get most often is “Oh, I could never do that — I’d never get any work done!” You’d think that the desire to be productive and earn some money would be enough motivation to stay on task, but this isn’t true for everybody. In my work as an editor, I’m always surprised at how many full-time freelance writers blow deadlines and make all kinds of excuses about turning work in on time. It just goes to show you that some people will procrastinate even when their livelihood’s at stake. Other writers are so productive, I can hardly keep up. I think it can all be chalked up to personality. When you work unsupervised, you get to manage your own time. That’s a perk, but not for those who aren't able to keep themselves on task.

There Are Distractions

When you work in an office, everyone is supposed to be working. That usually means distractions are fairly minimal, or at least pertinent to the job. Not so at home. Neighbors knock at the door because they know I’m home. Ditto with phone calls. Plus, when the laundry and chores are literally piling up around me, it can be hard to ignore them in favor of paid work. One distraction I don’t have — kids. That’s a whole other challenge that some people have to manage as well. I try to set some hours and spend them working, while ignoring as many distractions as possible. There will be distractions, though, so it's best to have a game plan about how to manage them.

You Still Need a Schedule

What I like about working from home is flexibility. My time is my own, which allows me to build a day that reflects what’s important to me. I can pick people up from the airport, take a break to go for a run outside on a beautiful day, or visit with a friend who suddenly appears in town. That said, it’s remarkable how quickly all the fun stuff can cut into work hours. Overall, I try to keep a pretty consistent schedule. And when there’s nothing fun to do, I pile on as much work as I can stomach. That gives me some breathing room when I get a good reason to ditch my desk for the afternoon.

People Assume You Don’t Work

If you work from home, many people will assume that you spend the day napping and watching TV. I haven’t figured out how to be paid to do this yet, so it doesn't happen (but I’ll keep you posted). The truth is, I’d probably be lazier if I was working on someone else’s time rather than my own.

Deductions Are a Good Thing...Sort Of

There are definitely some cost savings to working out of a home office: no commute, no business suits, no Starbucks latte. You can also deduct some home and business expenses. But there’s one thing people forget about deductions, which is that you have to spend money to take them. As a result, having a ton of deductions isn’t necessarily such a great thing. It just means you spent a lot of money to make money. You can also deduct some home expenses, such as Internet, telephone, and utility bills. The catch is you can only deduct the portion that’s used for your work. And trust me, once you divide it all out, that deduction won’t be nearly as exciting as you thought it would be.

You’ll Work a Lot

When you work and relax on the same turf, it can be hard to figure out where work ends and home begins. That tends to mean that I’m often typing away on evenings and weekends, too, because if I can be making some money, I should be, right? Actually, no. Because the longer I work, the slower (and grumpier) I get. And that doesn’t make for good writing — or a good life, for that matter.

It Can Be Lonely

I recently fell off my bike and hurt myself badly enough that I couldn’t do any of the things I normally do to get myself out of the house, such as taking a run with my friends, going to yoga, or strolling the neighborhood with my boyfriend. This meant that I basically never left the house for an entire week. If you work from home — and I can’t stress this enough — you need to find activities that will get you out of the house every day. Otherwise you will basically become a hermit. At home. In your PJs. And frankly, that’s a bit sad.

Working at home isn’t for everyone, but it certainly has its perks. If you’re pondering making this shift, be honest with yourself. Some people are well-suited to being their own bosses, but that isn’t true for everyone. I also have a hunch that if people realized how much work they’d really be doing, they might not be so keen on ditching the office job. Plus, it’s nice to get dressed sometimes.

Written by Tara Struyk and published on Wise Bread. Read more articles from Wise Bread.

Bohemians Then and Now

Philip Brewer — Fri, 11 Feb 2011 14:00:10 +0000

The bohemian lifestyle keeps being reinvented. Whenever people try to make a go of supporting themselves through their creative endeavors, it appears naturally out of the confluence of poverty and the freedom to ignore social conventions that comes of not having a boss. (See also: 6 Reasons to Become Self-Employed)

Making a living as an artist (including not just visual artists but also writers, musicians, dancers, actors, etc.) is fundamental to bohemianism. Richard Florida, author of The Rise of the Creative Class, created a "bohemian index" based on what fraction of the population in an area is earning a living through creative pursuits.

For most artists, most of the time, supporting yourself through your art means poverty. There are occasional "golden ages" of one thing or another during which it's possible for large numbers of artists to make a middle-class living with their art, but they're rare.

Right now we're living in something of, let's call it a "silver age." Largely because of the internet, there are a lot of ways to make a little money from art, writing, music, etc. (especially if by "etc." you include things like web design). Whereas the original bohemians pretty much had to live in a densely populated urban center, because it was only there that an unknown artist had any hope of earning a living, now artists can be location independent.

Still, bohemianism and urbanism are pretty tightly bound. Richard Florida's bohemian index shows that the most bohemian locations are large urban centers (although many large urban areas are not particularly bohemian).

For many people, though, it's the unorthodox lifestyle — the living arrangements, the political and social views — that they think of when they think of bohemians. It's the freedom that appeals.

Of course, the freedom has a broader appeal if it can be achieved without the poverty, and in today's permissive society, it often can be. Often enough, in fact, for New York Times columnist David Brooks to have managed to get a whole book — Bobos in Paradise — out of the phenomenon he called "bourgeois bohemians." The people Brooks is talking about don't live in poverty — in fact, they're quite affluent — but their lifestyle looks somewhat bohemian because they eschew conspicuous consumption. But they actually spend a lot of money. It's voluntary, but it's neither simplicity nor frugality.

As far as I know, no one has a index for what fraction of the population is practicing voluntary simplicity.

What's interesting to me about modern bohemianism is that the directionality can flow in the opposite direction: If you choose to live frugally, you gain much of the freedom that made the original bohemians so distinctive. (Of course, even if the standard of living in each case is about the same, poverty and voluntary simplicity are very different things.)

Instead of a commitment to one's art forcing one into poverty, the voluntary acceptance of a frugal lifestyle enables one to commit to one's art. And, if you have a little capital, the lifestyle choices don't need to seem much like poverty at all.

It's a modern bohemianism.

Disclosure: This post contains affiliate links, and I will earn a commission for any purchase made through these links.

Written by Philip Brewer and published on Wise Bread. Read more Lifestyle articles from Wise Bread.

Getting by without a job, part 2--boost income

Philip Brewer — Sat, 29 Nov 2008 22:38:57 +0000

[Editor's note: If you recently lost your job, take a look at Wise Bread's collection of tips and resources for the recently laid off.]

If there's one fundamental rule for financial success, it's "spend less than you earn." That rule applies whether you have a job or not. But, if you're used to having a job, the adjustments to getting by without one are going to be huge. It can be done, though. I suggest a three-pronged strategy, the first prong being to boost your income.

This is part two of a four-part series. Part 1 was on the first things to do if you lose your job. Parts 3 and 4 will be on cutting expense and getting what you need without money. Look for them here over the next few days.

There are countless ways to raise your income, besides the obvious one of getting a job (which I assume that you're already applying yourself to in a workman-like fashion). Here are a few categories, and a few suggestions.

Casual labor

The most obvious option is working--just outside the framework of a regular job. Some kinds of work are traditionally structured this way and others are freelance versions of work that is just as often done by employees. Either way there's a long list of possibilities. Here are just a few:

handyman
house cleaner
house painter
gardener
writer
editor
web designer
massage therapist
dog walker
photographer
tutor
bicycle messenger

None of these are likely to be well-paid and all are likely to be facing a drop in demand (because the potential buyers are also suffering in the economic crunch) at just the same moment that there'll be a surge in supply (as all the other unemployed folks try to pick up a little extra cash). Still, an income above zero is better than an income of zero.

Seasonal and temporary work

This category covers everything from detasseling corn to being a department store Santa. Although in many cases people are technically hired as employees for these sorts of jobs, I'm including it because it's not like having a permanent job.

There are seasonal jobs for every season. In the weeks leading up to Christmas, stores hire extra sales help and delivery companies hire extra package loaders and sorters. There is agricultural work at almost any season except the dead of winter. These sorts of jobs are usually very hard work for not much pay.

Especially early in hard economic times, temporary work tends to dry up--temps are the first to be let go, during the phase when employers are still hoping to avoid layoffs. But there continues to be some temp work right along, because companies always need some things done and don't want to hire employees when they can't offer long-term employment. In particular, as a recession winds down--but while companies are still waiting to see if this is really a lasting increase in business--they often hire temps in large numbers.

Seasonal workers are usually hired directly. Temporary workers are more often hired through a temporary agency.

Employ yourself

Some people already have a small business that they were running on the side while working at a regular job, in which case ramping up the small business to bring in more money can be a great option. Other people have always wanted to run a small business, and losing a job can give them the freedom to take a chance on doing so sooner rather than later.

If you don't already have a small business--or at least have some kind of small business in mind--this may not be the best choice. Starting a small business requires capital, and unless running a business is what you really want to do, you might be better off just investing the capital in something that pays interest.

Sell assets

Another place to get some money, at least for a while, is to sell stuff that you've got that has some value. Sadly, it's probably the case that most of your stuff is worth only a tiny fraction of what you paid for it, but a lot of it will nevertheless be salable. Depending on the item, consider:

vintage clothing stores
consignment shops
pawn shops
used bookstores
garage sales
internet classifieds and auction sites

This is a limited source--you've only go so much stuff--but you can pick up some money here.

Sell crafts

More sustainable than selling your used stuff is selling stuff you make. Almost any hobby that produces an actual thing (quilts, sweaters, mugs, earrings, jam) can produce some cash income--sometimes quite a bit. Even when it isn't particularly profitable--when the selling price barely covers the cost of materials or maps to a ridiculously low hourly wage--it can still be a way to turn stuff you bought back when you had a job (fabric, yarn, beads) into more money than you could make trying to sell the raw materials.

Stuff you make is also good for bartering, something that I'll talk about in part 4 of this series.

Other hobby-related income

Related to selling things you produce, many hobbies also provide other ways to pick up some extra cash by teaching, writing, speaking, and so on. I wrote about this a while back in Make your hobby pay its way.

Rent out assets

Some assets can be rented out in a way that produces a sustainable income rather than the one-time cash payment you'd get from a sale. Your savings earns some amount of interest (until you spend it). A spare room in your house can be rented out to a boarder. There are legal issues involved--if you rent your car to someone, you're probably taking on considerable liability if he gets into an accident--but if you've got stuff that people will rent, it's worth considering.

Not a complete solution

For most people, the sort of money you can pick up through casual labor or by selling crafts will never match what you could make at a regular job. That means that, if you want to get by without a job, you're almost certainly going to have to cut your cost of living--the topic of the next post in this series:

Written by Philip Brewer and published on Wise Bread. Read more Career and Income articles from Wise Bread.

6 Reasons to Become Self-Employed

Kate Luther — Fri, 01 Feb 2008 00:15:10 +0000

At some point in their lives, everyone has dreamed about starting their own business. Whether it's selling cosmetics and beauty products, marketing your own personal invention or selling drop-ship items through eBay, there's just something really sexy about the idea of being your own boss.

And you know what? You're right. There are indeed many reasons that you should consider joining the ever-growing forces of the self-employed. Here's what I think are the top six.

No More Rush-Hour

Do you realize how much time is wasted sitting in traffic? Not to mention the stress and anxiety you endure when traffic doesn't move the way it should. Rush-hour is just bad, no matter how you look at it. It doesn't matter if you use that time to reflect on your day, chit-chat on your cell or learn to speak French with your audio course - it's still something that I'm betting we can all do without. No more rush-hour means you won't be wasting gas. No more rush-hour also means you don't have to worry about driving on icy bridges, sliding on slick roads, or navigating in the middle of a "can't see 5 feet in front of me" downpour.

No More Pantyhose

Or stifling ties, business suits, or uncomfortable shoes. In fact, no more dress code at all. Unless of course, you're opening a business where you actually meet your clients face-to-face but even then, you still have a little leeway in choosing what to wear.

No More Security Blanket

That's right...become self-employed and you'll no longer have the luxury of a fixed income every month. But was that security blanket really all that secure? A corporation can lay you off without warning -- maybe you'll get a severance package and maybe you won't. But while you're laying awake at night wondering what on Earth you're going to do, they'll all be sleeping nicely. Doesn't seem fair does it?

No More Meetings

Okay, yes..you might still meet with clients but what you won't do is attend meetings to plan a meeting about an upcoming meeting. No, that's not a typo. For all their innovation and manpower, big businesses have a lot of red tape. You can't just order something when you need it -- you have to first fill out the proper form and get the proper signatures. If a problem arises, chances are you can't just fix it -- it has to go through the necessary channels. And there's a good reason for that. With a staff in the thousands, you'd be crazy to just give every employee the "pen" and allow them to do things as they please. But you don't have a staff in the thousands. You have a staff of one. You. And if you want to make an executive decision, there's absolutely no one to say that you can't.

No More Vacation Days

Do you want to take a day off and go to the beach? Wish you could go eat lunch with your first grader? Now you can! Being self-employed may initially mean you work a little harder or a little longer but it also means that you have the flexibility to do what you need when you need to do it. As a freelance writer, I can adjust my days to meet the needs of my family. Sometimes, that means I'm up writing late at night when everyone else is sleeping but hey...I'm a night-person by nature and I don't have an alarm clock that's going to start chiming at some ridiculously early hour. So, if I need to pick my kids up from school, I can. If there's a soccer practice or a band performance or even if I just feel like sleeping in until 10am, I can. And as a self-employed person, so can you.

No More Raises

Perhaps the biggest reason to join the ranks of the self-employed is the pure potential for earning your worth. Yes, you might put in some long hours to do so, but working for yourself puts you in the financial driver's seat. No more raises, no more bonuses and no more steady paychecks but you have the opportunity to actually earn what you want. Why? Because as an entrepreneur, you decide the value of your work - not an employer.

Written by Kate Luther and published on Wise Bread. Read more Entrepreneurship articles from Wise Bread.

Five Easy Steps to Keeping Track of Expenses for the Self-Employed

Nora Dunn — Fri, 28 Sep 2007 04:22:23 +0000

I have had as many as five separate businesses at once to keep track of, including proper accounting of expenses for tax purposes. And it takes me no more than 5 minutes per week to do.

A big hassle for most people I know who are self-employed or in contract positions (especially in creative fields) is the boring necessity to track expenses and receipts for tax purposes.

There are a few methods I've seen employed that leave a little to be desired:

The Shoebox Approach.

This usually entails a nightly or weekly emptying of the wallet or pockets into a shoebox labelled "taxes". At the end of the year, one of two things happens: The culprit dedicates long days upon days to "file their taxes". Really this process is less about the tax preparation itself and more about sifting through piles of receipts, tallying up everything with calculators, and hoping that everything adds up.

The other option for the shoebox guru is to simply take the unkempt pile of receipts into their accountant or bookkeeper and get them to sort through everything.

I see two problems with this strategy:

1: The daunting task of taking time off to sift through receipts and prepare taxes makes it one of the dullest and soul-sucking chores around. So consequently throughout the year there is less motivation to save the right receipts since it will just have to be tallied at the end of the year and less receipts to tally means less of a pain in the you-know-what to contend with. It also means less tax dollars saved.

2: For those that go with the bookkeeper option, you are spending more money paying somebody else to do something that could easily be maintained yourself. For the frugal business owners in us, it's not always a wise expenditure.

The Day-timer Approach.

You know those expense logs that often come with the reference pages for most day-timers and schedules? Well, I haven't actually seen anybody use them successfully, but they keep coming out every year so I have to assume that somebody uses those pages and likes them.

My beef with that approach is that there is no proper filing of the receipts which are needed for the actual tax preparation (which relegates even the Day-timer User to the Shoebox Approach in a manner), and when it comes down to tax time even the expense logs need to be re-categorized and shuffled by hand according to the types of expenses incurred.

Here's what I personally do with my receipts, and it seems to work out quite well for me and is not time consuming at all:

1: Whenever I incur an expense, I usually stuff the receipt in my wallet until I get home, or until there are enough receipts in my wallet that it occurs to me to take them out. (This usually happens about once a week).

2: Once I've pulled the pile of receipts from my wallet, it's time to deal with them right then and there. I enter the following information into a spreadsheet:

Date

Vendor

Type of expense for tax purposes (eg: auto, office expenses, advertising, insurance, etc)

Amount of money spent

Additional notes (eg: that dinner I'm claiming was when I took John Doe out to discuss ABC business, or that auto expense is specifically for gas or repairs.)

3: Once entered, I file the receipts away. I have a file folder that stores all the receipts for the year, and I clip all the receipts together by expense. For example, within my folder is an "auto" pile held together with a paperclip to which I attach my gas receipts.

This way if I ever need to reference the original receipts again, I can easily put my hands on that specific receipt since it's already filed according to category and roughly by date as well since I enter and file the receipts regularly.

That's it for the daily or weekly maintenance. No more than five minutes each week once you get into a system that works for you, I promise!

When it comes to tax time, I go through a few additional steps to make things easier on my accountant:

4: Since all my receipts are logged in spreadsheet format, all I have to do now is organize the spreadsheet. Using data sorts and searches, I create a page for each type of expense and print it out. For example my advertising page itemizes all the expenses I incurred for that category, showing dates, amounts, and special notes.

This process can be tedious especially if you are still learning how to categorize your expenses or manipulate spreadsheet information. But it gets easier and easier each year, and at the height of my business frenzy, it sill only took me a couple of hours to do.

5: I take all the printed spreadsheets (along with the original receipts just in case we need to reference them) to my accountant. I sit there with my accountant as we review the spreadsheets. If he or she feels that a certain expense is best claimed in another area, then we can easily subtract it from the total on that sheet, and add it to another sheet. It's a great learning experience for me, so the following year I can better manage my receipts and have a greater understanding of how to file taxes to get the best bang for my bucks spent.

Not only is this approach easy and helps me to maintain some semblance of control over my finances, but I also save money even with my accountant, since I've already done a lot of the prep work. All he or she has to do is plug in the numbers and tell me how much money I saved!

Written by Nora Dunn and published on Wise Bread. Read more Taxes articles from Wise Bread.