Thanks to all of you who have emailed us at info@yourmoneyoryourlife.info to share information or to ask us specific questions about the Your Money or Your Life program. We recently got an inquiry from a man who wanted to know how freelancers and self-employed people are supposed to apply the real hourly wage concept. The short answer is that we encourage practitioners to calculate the average from all income sources to determine one’s hourly wage each month. For a more detailed answer to this topic, visit www.financialintegrity.org.
The same person also wanted to know how self-employed people should account for taxes. Everyone does this differently, but be aware that most self-employed folks choose to file and pay taxes quarterly. One option would be to set aside money each month and to count it as a monthly expense. If your annual tax bill is ultimately less than you expected, you can then count that money later as income. It’s really all about what works best for you.