WEBVTT - Financial Survival Tips for The Self-Employed 0:00:00.330 --> 0:00:02.940 This series is brought to you by L& G, helping 0:00:02.940 --> 0:00:05.010 you build a future that's a little bit richer. 0:00:06.390 --> 0:00:09.450 Hello and welcome to A Little Bit Richer with me, 0:00:09.450 --> 0:00:13.260 Iona Bain, brought to you by Legal & General. Now, being self- 0:00:13.260 --> 0:00:17.280 employed can be a financial rollercoaster. Managing the ups and 0:00:17.280 --> 0:00:20.820 downs definitely can be a challenge, whether it's sending invoices, 0:00:21.060 --> 0:00:24.900 juggling projects, or looking for new clients, it's easy to 0:00:24.900 --> 0:00:28.500 forget that actually what's most important is the freedom of 0:00:28.500 --> 0:00:31.470 being your own boss, even if it can feel unpredictable 0:00:31.470 --> 0:00:34.530 at times. But how can you make the self- employed 0:00:34.530 --> 0:00:37.589 life work for you? Well, whether you're bossing it already 0:00:37.830 --> 0:00:40.830 or dreaming of working for yourself one day, here to 0:00:40.830 --> 0:00:43.560 give us some tips on managing finances is friend of 0:00:43.560 --> 0:00:47.370 the show and fellow freelancer, Crystal McGillivray. Crystal is an 0:00:47.370 --> 0:00:51.540 accountant, campaigner, and speaker who actually has a master's in 0:00:51.540 --> 0:00:55.680 behavioral and economic science, so she's just the person we 0:00:55.680 --> 0:00:58.200 need to talk to about planning ahead when you're working 0:00:58.200 --> 0:01:00.180 for yourself. Welcome, Crystal. 0:01:00.240 --> 0:01:01.980 Hi, I'm so glad to be here. 0:01:02.130 --> 0:01:05.040 Can you set the scene for us and describe the 0:01:05.040 --> 0:01:07.709 kinds of challenges that the self- employed can face? 0:01:07.740 --> 0:01:10.530 Yeah, self- employment is such a fun thing to do, 0:01:10.530 --> 0:01:14.069 but income is so unpredictable. The challenge that a lot 0:01:14.069 --> 0:01:16.740 of self- employed people face is not having that stable 0:01:16.740 --> 0:01:19.319 income like you do when you are employed. You have 0:01:19.319 --> 0:01:21.540 your salary, it's paid every month at the same time, 0:01:21.569 --> 0:01:25.709 guaranteed. But when you're working for yourself, you're often chasing 0:01:25.709 --> 0:01:29.430 clients, you're dealing with payment terms, you're having to look 0:01:29.430 --> 0:01:31.860 at your bank account and think about costs, so there's 0:01:31.860 --> 0:01:34.260 quite a few things to manage in making sure that 0:01:34.260 --> 0:01:37.740 that business runs and functions nice and smoothly. Yeah, it's 0:01:37.740 --> 0:01:38.130 a job. 0:01:38.190 --> 0:01:41.760 But how important is it for the self- employed to 0:01:41.790 --> 0:01:47.280 just normalize the conversation around their finances and not fear 0:01:47.280 --> 0:01:49.710 them and not kind of think that they're failing if 0:01:49.710 --> 0:01:53.250 they find some aspects of this whole issue quite tricky? 0:01:53.610 --> 0:01:55.470 I mean, I guess what we're thinking about here is 0:01:55.740 --> 0:01:59.160 when you are employed, your finances are effectively sorted with 0:01:59.160 --> 0:02:02.880 a pension and you're contributing, you set that money aside 0:02:02.880 --> 0:02:05.850 for however many years, you have a retirement plan. When 0:02:05.850 --> 0:02:08.639 you're self- employed, if you don't do that, if you're 0:02:08.639 --> 0:02:11.340 living in the moment, kind of generating an income, covering 0:02:11.340 --> 0:02:14.669 your costs, you're living for today, and you actually don't 0:02:14.669 --> 0:02:18.150 have anything put away for later in life, whether that's 0:02:18.150 --> 0:02:23.130 saving, investing, so it's really key to do that initial 0:02:23.130 --> 0:02:26.340 hard work to get clear on that financial aspect and 0:02:26.340 --> 0:02:29.850 set something up so that later you can relax. 0:02:29.850 --> 0:02:32.520 Absolutely. Like you deserve if you've worked really hard. 0:02:32.520 --> 0:02:32.760 Yeah. 0:02:33.630 --> 0:02:36.930 What are the practical ways that people can manage their 0:02:36.930 --> 0:02:39.750 money when their income isn't predictable? 0:02:39.960 --> 0:02:42.389 First of all, it's really getting clear on the cash 0:02:42.450 --> 0:02:44.400 side, so if we think about bills, things you have 0:02:44.400 --> 0:02:47.460 to pay for. Doing that initial bit of work of 0:02:47.610 --> 0:02:50.880 looking through what subscriptions do I have? What cost do 0:02:50.880 --> 0:02:53.730 I incur to make this business run? But then outside 0:02:53.730 --> 0:02:56.760 of that, what are your personal living expenses? When you're 0:02:56.760 --> 0:02:59.070 thinking about your income that you need to generate, you're 0:02:59.070 --> 0:03:01.500 clear on what that number needs to be. And then 0:03:01.500 --> 0:03:04.980 you're stabilizing ideally in terms of your business plans to 0:03:04.980 --> 0:03:08.130 generate that income. And that allows you to also factor 0:03:08.130 --> 0:03:12.300 in savings, investments, and set up those automations so you can 0:03:12.300 --> 0:03:13.410 plan for the future. 0:03:13.889 --> 0:03:17.460 Are there particular budgeting techniques that might work for a self- 0:03:17.460 --> 0:03:20.400 employed person who's facing that irregular income? 0:03:20.580 --> 0:03:23.669 Yeah, there's a few. I mean, the first point again 0:03:23.669 --> 0:03:26.130 is really being clear about your ins and outs, so 0:03:26.130 --> 0:03:28.680 having that as your foundation. And you might want to 0:03:28.680 --> 0:03:30.930 think ahead of, I need to pay this much to 0:03:30.930 --> 0:03:34.800 myself as a minimum to be okay. And one thing 0:03:34.800 --> 0:03:37.740 that's really topical is of course the irregularity of your 0:03:37.740 --> 0:03:40.920 income, so you may have months that are amazing and 0:03:40.920 --> 0:03:43.800 you'll pay maybe three, four times the basic. 0:03:44.010 --> 0:03:46.590 And then it's very tempting to celebrate. 0:03:46.590 --> 0:03:47.310 Yes, of course. Yeah. 0:03:48.150 --> 0:03:50.700 But perhaps that's the month when you need to make 0:03:50.700 --> 0:03:54.210 sure that you're putting extra aside for the lean times. 0:03:54.240 --> 0:03:57.720 You're spot on. Yeah, so those months where it's amazing 0:03:57.720 --> 0:04:00.990 and you've been such a success, still see as, okay, 0:04:00.990 --> 0:04:02.550 I'm going to pay myself what I need to pay 0:04:02.550 --> 0:04:06.660 myself and put this extra into an emergency fund, maybe 0:04:06.660 --> 0:04:09.600 top up your pensions if you haven't maximized. And of 0:04:09.600 --> 0:04:13.230 course you can celebrate, but do it within reason and 0:04:13.230 --> 0:04:14.280 prepare for the future. 0:04:14.940 --> 0:04:18.060 What is a good way to handle those periods when 0:04:18.060 --> 0:04:22.920 you've got big invoice gaps, dry spells? How can someone 0:04:22.920 --> 0:04:25.620 who is self- employed smooth their cash flow? 0:04:26.279 --> 0:04:29.099 We call it cashflow management. This is where you are 0:04:29.100 --> 0:04:33.089 paying attention to the fluctuations of your bank balance effectively, 0:04:33.360 --> 0:04:35.219 so you think about your bank statement and you think 0:04:35.220 --> 0:04:37.140 about the numbers going up and down in terms of 0:04:37.140 --> 0:04:39.150 your end of day balance. What you want to do 0:04:39.150 --> 0:04:42.510 is make sure it does not drop to a negative. That 0:04:42.510 --> 0:04:44.670 requires you to have maybe a buffer. It could be 0:04:44.670 --> 0:04:47.969 that you have separate bank accounts, so money comes into 0:04:47.970 --> 0:04:50.760 one account, but then is dispersed amongst different accounts for 0:04:50.760 --> 0:04:54.089 different things. And that helps you manage taxes in the 0:04:54.089 --> 0:04:57.089 future, making sure you're paying yourself a set amount. 0:04:57.150 --> 0:05:00.240 Yeah, absolutely. Setting aside money for your tax is really 0:05:00.240 --> 0:05:03.360 important because that can be a nasty surprise for a 0:05:03.360 --> 0:05:05.880 lot of people who are new to being self- employed. 0:05:07.410 --> 0:05:09.660 I hear it all too often. People who've had that 0:05:09.660 --> 0:05:12.750 uncomfortable, unfortunate situation where they weren't aware of what their 0:05:12.750 --> 0:05:15.839 tax bill would be come January. When you are due 0:05:15.839 --> 0:05:18.630 to pay your taxes and submit your return, the deadline, 0:05:19.020 --> 0:05:22.620 and whether it's 3, 000 pounds or much more, but 0:05:22.620 --> 0:05:25.050 actually you can find out way before, and that's kind 0:05:25.050 --> 0:05:27.330 of part of the managing your money that I encourage. 0:05:27.390 --> 0:05:29.430 Yeah, absolutely. And even if you end up using an 0:05:29.430 --> 0:05:32.400 accountant and lots of self- employed people do, you will 0:05:32.400 --> 0:05:35.039 always feel that much more empowered if you understand the 0:05:35.040 --> 0:05:39.330 numbers yourself. I know an awful lot of folks who 0:05:39.330 --> 0:05:41.520 are listening to this and watching this who are self- 0:05:41.520 --> 0:05:46.710 employed will face this problem. It's chasing invoices. We have 0:05:46.710 --> 0:05:49.349 all been there. I know I have. Do you have 0:05:49.350 --> 0:05:51.900 any advice on how you can navigate that issue? 0:05:52.320 --> 0:05:54.480 There's a couple of things. First of all, I encourage 0:05:54.480 --> 0:05:58.529 people to send invoice reminders, even before it's due, so 0:05:58.529 --> 0:06:00.585 you could send a polite email, " Hey, just letting you 0:06:00.585 --> 0:06:02.130 know your invoice is due in a week or so. 0:06:02.130 --> 0:06:04.680 Thanks. Great working with you." But what you're doing there 0:06:04.680 --> 0:06:07.289 is making sure that they have your invoice and it's 0:06:07.290 --> 0:06:09.089 on their radar, so it hasn't got lost in the 0:06:09.089 --> 0:06:12.690 emails. Also, and this is kind of before the fact, 0:06:12.930 --> 0:06:15.180 making sure you've got the right information, you've got the 0:06:15.180 --> 0:06:17.190 right email contact, you've got the right address for the 0:06:17.190 --> 0:06:19.560 company, that you're invoicing, et cetera. 0:06:19.890 --> 0:06:23.250 Get that established straightaway when you start working with the client. 0:06:23.279 --> 0:06:25.830 Often if you're working with a company, they pay based 0:06:25.830 --> 0:06:28.950 on invoice date, so the longer you take to invoice, 0:06:28.950 --> 0:06:31.950 the later you'll be paid. There's also one that I 0:06:31.950 --> 0:06:33.779 encourage people to do, but I know also is a 0:06:33.779 --> 0:06:37.740 little bit uncomfortable. You can actually charge a penalty if 0:06:37.740 --> 0:06:41.159 your client is late to pay. And what I say 0:06:41.160 --> 0:06:43.080 to do is just pop a little narrative on the 0:06:43.080 --> 0:06:45.029 bottom of your invoice to say you will be charged 0:06:45.029 --> 0:06:48.120 a penalty if this is late. And often that alone 0:06:48.120 --> 0:06:50.940 just deters people paying you late, so it's a little 0:06:50.940 --> 0:06:52.589 kind of secret weapon you could have. 0:06:52.950 --> 0:06:55.920 I think it's interesting that just saying that you are 0:06:55.920 --> 0:07:00.570 legally entitled to charge, I think it's 8% interest on 0:07:00.570 --> 0:07:03.510 the value of your invoice if it is later than 0:07:03.510 --> 0:07:06.420 it should be. That alone will often do the trick 0:07:06.420 --> 0:07:08.370 because it just shows that you know your rights. 0:07:08.400 --> 0:07:08.849 Yes. 0:07:08.910 --> 0:07:11.310 And it indicates to the person who should be paying 0:07:11.310 --> 0:07:12.239 you that they can't mess you about. 0:07:12.900 --> 0:07:15.660 And then one other point, requesting a deposit, so money 0:07:15.660 --> 0:07:19.290 upfront before you actually start the work, especially if you 0:07:19.500 --> 0:07:21.780 are going to incur some costs along the way. 0:07:22.170 --> 0:07:24.300 And especially if it's a longer term project, say you're 0:07:24.300 --> 0:07:26.670 working on it for six months, it's more than reasonable 0:07:26.670 --> 0:07:29.580 to say, how about we have one payment upfront and 0:07:29.580 --> 0:07:31.260 then the other payment on completion? 0:07:31.290 --> 0:07:34.890 Or even break it down even further, quarters, maybe set 0:07:34.890 --> 0:07:38.310 milestones, but I encourage people to have those conversations early 0:07:38.370 --> 0:07:40.650 and see if there's room for that to happen. 0:07:40.890 --> 0:07:45.120 And what's your feeling about clients that despite you following 0:07:45.120 --> 0:07:47.310 all these rules and doing your best to get that 0:07:47.310 --> 0:07:50.190 invoice paid on time, they just won't pay up and 0:07:50.190 --> 0:07:53.520 it does happen occasionally? What are your thoughts on maybe 0:07:53.550 --> 0:07:56.520 deciding not to work with those clients again? Because freelancers 0:07:56.520 --> 0:07:59.310 find it difficult, don't they, to walk away from clients 0:07:59.550 --> 0:08:02.400 even when they're late paying invoices. 0:08:02.910 --> 0:08:04.710 When it comes to chasing payments, loop in who you 0:08:04.710 --> 0:08:06.989 need to, it kind of opens up that conversation so 0:08:06.990 --> 0:08:09.990 more people know about it. But in terms of somebody 0:08:09.990 --> 0:08:14.130 who has paid you late, I don't feel right saying 0:08:14.130 --> 0:08:16.440 don't work with them again. I think because it depends 0:08:16.440 --> 0:08:17.580 on the client, right? 0:08:18.030 --> 0:08:18.090 Yeah. 0:08:18.150 --> 0:08:21.960 For example, me, I'm not sensitive to receiving late payment 0:08:21.960 --> 0:08:24.750 and that's because I have reserves and my financial situation 0:08:24.750 --> 0:08:27.960 makes that okay. As long as it's a good relationship, 0:08:28.170 --> 0:08:31.470 especially if you're working with a large organization, there's quite 0:08:31.470 --> 0:08:34.110 a bit of a process to go through to get 0:08:34.110 --> 0:08:36.390 that paid. And actually a real case, I'm working with 0:08:36.390 --> 0:08:38.940 someone now, they encouraged me to send the invoice a 0:08:38.940 --> 0:08:40.800 month before we started working together. 0:08:41.760 --> 0:08:42.840 They sound like a dream client. 0:08:43.350 --> 0:08:46.020 Great client. It's been like a month and a half 0:08:46.020 --> 0:08:49.500 now. They're late paying. They're not being difficult. There's just 0:08:49.500 --> 0:08:52.110 lots to go through to get that settled. And then 0:08:52.110 --> 0:08:54.450 also you're thinking about the value of the client. Is 0:08:54.450 --> 0:08:57.720 it worth it? Do you still definitely get paid? What 0:08:57.720 --> 0:09:00.630 is it doing for your career? Is it an investment 0:09:00.660 --> 0:09:03.030 in that sense that actually working with them is going 0:09:03.030 --> 0:09:05.880 to position me quite well? If that stuff is not 0:09:05.880 --> 0:09:08.850 included, then yes, maybe question, should I work with them? 0:09:08.850 --> 0:09:11.160 If, am I wasting time that it could be spent on 0:09:11.160 --> 0:09:13.709 more valuable things, getting this paid? 0:09:13.830 --> 0:09:17.400 That's really good advice, Crystal, because I think it's very 0:09:17.400 --> 0:09:19.470 difficult to be able to make a hard and fast 0:09:19.470 --> 0:09:22.200 rule about these things. But what I will say is that 0:09:22.530 --> 0:09:25.679 the more that freelancers can stick up for their rights 0:09:25.679 --> 0:09:27.870 and make sure that they get what they deserve, and 0:09:27.870 --> 0:09:30.630 that includes having your invoices paid on time, even if 0:09:30.630 --> 0:09:31.920 you do it in a polite way. 0:09:31.950 --> 0:09:35.309 And actually, there are some organizations that have policies where 0:09:35.309 --> 0:09:40.410 they pay freelancers, self- employed people immediately because they understand 0:09:40.500 --> 0:09:42.720 the situation when it comes to working for yourself, money 0:09:42.720 --> 0:09:45.000 management. I mean, if you can seek out those companies 0:09:45.000 --> 0:09:45.540 to work with- 0:09:45.540 --> 0:09:48.030 And that's where networking with other self- employed folks- 0:09:48.031 --> 0:09:48.032 Yes. 0:09:48.032 --> 0:09:50.250 ... can really help because they can say, " Those are 0:09:50.250 --> 0:09:53.189 great clients. Those ones, not so much." 0:09:53.190 --> 0:09:54.780 Not so much. 0:09:55.020 --> 0:09:57.059 Crystal, you already touched on this, but how can we 0:09:57.059 --> 0:10:00.959 make sure that we are not neglecting longer term things 0:10:00.960 --> 0:10:03.780 that are really important like our retirement savings? 0:10:03.840 --> 0:10:06.630 I think first of all, it's definitely roll up your 0:10:06.630 --> 0:10:09.330 sleeves and do your numbers, so know how much you 0:10:09.330 --> 0:10:12.120 have available, know how much you want to have available 0:10:12.120 --> 0:10:15.660 later in life, so maybe use a retirement calculator to 0:10:15.660 --> 0:10:17.880 see, okay, what does that look like? How much do I need to 0:10:17.880 --> 0:10:20.760 put away every month to get there? But in terms 0:10:20.760 --> 0:10:24.210 of now in the practical sense, automate is always my answer. 0:10:24.270 --> 0:10:26.730 And when you talk about automation, can you give us 0:10:26.730 --> 0:10:28.770 a couple of examples of what that looks like? 0:10:28.830 --> 0:10:32.100 Yeah, of course. If we're thinking about investing or putting 0:10:32.100 --> 0:10:34.890 money aside into an ISA or a pension pot, a 0:10:35.250 --> 0:10:37.530 standing order or direct debit to go to that account, 0:10:37.530 --> 0:10:39.809 so you are saving every single month on the back 0:10:39.809 --> 0:10:42.089 of the calculations you've done for how much you want 0:10:42.090 --> 0:10:44.640 to have in retirement. The automation is that money leaving 0:10:44.640 --> 0:10:47.309 your account to go towards investing, to go towards your 0:10:47.309 --> 0:10:49.830 saving pot. And once that's set up, you don't have 0:10:49.830 --> 0:10:50.429 to think about it. 0:10:51.179 --> 0:10:53.850 That is a very, very good hack. I also want 0:10:53.850 --> 0:10:56.939 to just touch on the different types of self- employed 0:10:56.940 --> 0:11:00.240 status because that can then have an impact on how 0:11:00.240 --> 0:11:04.170 you manage your finances. Can you just very briefly talk 0:11:04.170 --> 0:11:07.470 us through the difference between a sole trader and someone 0:11:07.470 --> 0:11:08.850 who has a limited company? 0:11:09.150 --> 0:11:12.150 When you're a sole trader, basically all the money you 0:11:12.240 --> 0:11:15.210 earn effectively is you earning that money, so everything you 0:11:15.210 --> 0:11:17.640 pay for comes out of that number, so income and 0:11:17.640 --> 0:11:21.059 costs come out. What's left is your profit, and that's 0:11:21.059 --> 0:11:25.170 where tax is calculated. Quite basic, quite straightforward. When you 0:11:25.170 --> 0:11:28.829 have a limited company, it's a separate legal entity, so 0:11:28.830 --> 0:11:33.300 it's almost like another person. You create this company and 0:11:33.300 --> 0:11:36.750 the company earns money and then you can pay yourself 0:11:36.750 --> 0:11:39.600 from that company. And it's a good time to mention 0:11:39.600 --> 0:11:43.199 that because if you think about maybe you were employed 0:11:43.200 --> 0:11:46.950 before and your company paid into your pension for you, 0:11:47.220 --> 0:11:49.350 you could set up the same thing for yourself where 0:11:49.350 --> 0:11:51.690 your company pays into your pension as well as you 0:11:51.690 --> 0:11:53.970 deducting it from your salary that you're paying yourself. 0:11:54.330 --> 0:11:57.089 Ah, so it's like you have a workplace pension. 0:11:57.240 --> 0:11:57.840 Exactly. 0:11:58.080 --> 0:12:00.809 And what advantages would that give you? 0:12:00.929 --> 0:12:03.540 So much. I mean, first of all, the payment to 0:12:03.540 --> 0:12:05.939 your pension from your company is seen as a tax- 0:12:05.940 --> 0:12:09.660 deductible, so when we talk about being self- employed, income, 0:12:09.660 --> 0:12:14.699 costs, profit, and then tax. Here, it's income, costs including 0:12:14.700 --> 0:12:18.959 that pension payment, then profit, and then you calculate your tax. 0:12:19.860 --> 0:12:22.440 That could be a good option if you are looking 0:12:22.440 --> 0:12:25.020 to really supercharge your pension saving. 0:12:25.140 --> 0:12:25.830 Absolutely. 0:12:25.980 --> 0:12:30.090 And are there particular tax benefits to having a limited 0:12:30.090 --> 0:12:32.100 company versus being a sole trader? 0:12:32.280 --> 0:12:35.100 Yes, there are. And it's one of the big questions 0:12:35.520 --> 0:12:39.720 that are put to me actually. When you earn over 0:12:39.780 --> 0:12:43.860 approximately 50K in terms of your income, there are tax 0:12:43.860 --> 0:12:46.890 benefits in terms of how you can pay yourself via 0:12:46.890 --> 0:12:49.890 a limited company, and eventually you start to pay less 0:12:49.890 --> 0:12:53.340 tax as a result. When people are deciding between self- 0:12:53.340 --> 0:12:56.970 employment or limited company, there are other factors to consider 0:12:57.270 --> 0:12:59.400 depending on who you're going to be working with, maybe 0:12:59.400 --> 0:13:02.189 they prefer you to have a limited company, but if 0:13:02.190 --> 0:13:05.460 those things don't really matter, like the legal status, liability, 0:13:05.850 --> 0:13:08.640 then sometimes being a sole trader is absolutely fine if 0:13:08.640 --> 0:13:12.900 you're not earning that much that the tax incentives are really 0:13:12.900 --> 0:13:13.830 going to show up for you. 0:13:14.700 --> 0:13:16.290 I guess it's one of those things where if you're 0:13:16.290 --> 0:13:19.470 not sure, maybe having a conversation with an accountant would 0:13:19.470 --> 0:13:19.980 make sense. 0:13:19.980 --> 0:13:20.460 Absolutely. Absolutely. 0:13:20.790 --> 0:13:23.460 What are some of the ways that self- employed folks 0:13:23.460 --> 0:13:26.910 can feel a bit more in control of their income and 0:13:26.910 --> 0:13:28.530 therefore their finances? 0:13:28.740 --> 0:13:31.620 The first thought that comes to mind is diversifying your 0:13:31.620 --> 0:13:35.550 income type. Often you may be a freelancer and you 0:13:35.550 --> 0:13:37.650 do the odd job and you do the old project, 0:13:37.860 --> 0:13:40.920 but actually thinking about having a retainer with clients where 0:13:40.920 --> 0:13:43.710 you're earning the same money from this particular client every 0:13:43.710 --> 0:13:48.390 month or recurring income and that would help provide kind 0:13:48.390 --> 0:13:50.910 of like a base level income and you can build 0:13:50.910 --> 0:13:51.600 on top of that. 0:13:51.960 --> 0:13:53.670 I have to say that I've had a lot more 0:13:53.670 --> 0:13:57.599 peace of mind ever since getting certain regular clients on 0:13:57.600 --> 0:14:01.109 my books as a freelancer, but also a lot of 0:14:01.110 --> 0:14:03.420 this is about the service that you offer and making 0:14:03.420 --> 0:14:06.540 it as unique as possible. And what are your thoughts on that? 0:14:06.630 --> 0:14:10.800 This is around the relationship building side and actually what 0:14:10.800 --> 0:14:13.260 are you selling and how are you communicating that and 0:14:13.440 --> 0:14:16.860 really targeting what these organizations need. And the other point 0:14:16.860 --> 0:14:20.760 I wanted to mention actually was income protection. Income protection 0:14:20.760 --> 0:14:23.550 is there to protect your income if say you were 0:14:23.550 --> 0:14:27.240 to get sick, so when we're talking about income uncertainty 0:14:27.240 --> 0:14:29.430 and not knowing how much you're going to earn next 0:14:29.430 --> 0:14:32.400 month or you possibly being ill because that does happen, 0:14:32.880 --> 0:14:35.220 you could have a policy in place that will pay 0:14:35.370 --> 0:14:38.820 your salary up to a certain percentage every month to 0:14:38.820 --> 0:14:39.840 see you through that period. 0:14:40.470 --> 0:14:42.271 And we're talking about an insurance policy here. 0:14:42.271 --> 0:14:43.530 An insurance policy. 0:14:43.590 --> 0:14:46.950 And people might be thinking, " I feel pretty healthy. And 0:14:47.280 --> 0:14:49.260 if I can't work, well, I'll just dip into my 0:14:49.260 --> 0:14:52.530 savings." But why might that be a little bit shortsighted? 0:14:53.190 --> 0:14:55.650 I mean, it's the hardest thing about insurance, isn't it? It's 0:14:56.070 --> 0:14:58.530 you don't know what's going to happen. And I'm sure 0:14:58.530 --> 0:15:00.750 we have all come across stories where something has happened 0:15:00.750 --> 0:15:04.979 unexpected and it just throws everything out of whack, but 0:15:04.980 --> 0:15:07.830 that insurance policy is there to help you. And when 0:15:07.830 --> 0:15:09.690 we're thinking about how much it costs, it's not a 0:15:09.690 --> 0:15:11.610 lot of money in the grand scheme of things for 0:15:11.610 --> 0:15:12.690 that peace of mind later. 0:15:13.620 --> 0:15:15.479 And I also just wanted to touch on an issue 0:15:15.540 --> 0:15:19.230 that is definitely a danger for the self- employed, which 0:15:19.230 --> 0:15:22.560 is that you can end up feeling like your self- 0:15:22.560 --> 0:15:25.350 worth is wrapped up with how much you earn and 0:15:25.350 --> 0:15:29.130 how well you're doing as a self- employed person. And 0:15:29.130 --> 0:15:34.170 as a recovering goalaholic, perfectionist, someone who used to really 0:15:34.170 --> 0:15:36.330 think that the career that I have was central to 0:15:36.330 --> 0:15:38.850 my identity is still very important to me, but I 0:15:38.850 --> 0:15:40.710 have learned to just take more of a step back 0:15:40.710 --> 0:15:43.081 from it in recent years. But it's hard, isn't it? 0:15:43.081 --> 0:15:46.770 It is hard. I think it's also hard to understand 0:15:46.830 --> 0:15:49.500 that the work you're doing, it's meeting a need of 0:15:49.500 --> 0:15:52.230 the person you're selling to. You're having a value exchange 0:15:52.500 --> 0:15:54.420 and that money you're being paid is off the back 0:15:54.450 --> 0:15:56.610 of how much of a need is it for that 0:15:56.760 --> 0:16:01.110 client or individual, less so you and your worth as 0:16:01.110 --> 0:16:04.560 a human. Making this a bit more practical, when you're 0:16:04.560 --> 0:16:06.690 having those conversations and you're maybe looking to price up 0:16:06.690 --> 0:16:09.990 your services, focus on what they're looking for, where their 0:16:09.990 --> 0:16:13.410 challenge lies, what they're trying to get sorted and focus 0:16:13.410 --> 0:16:16.560 the conversation on that because that's what they're paying you 0:16:16.560 --> 0:16:18.180 for, to address that issue. 0:16:18.300 --> 0:16:21.210 Yeah, absolutely. And it's striking that balance, isn't it, between 0:16:21.480 --> 0:16:25.980 not undervaluing yourself and then not taking your work home 0:16:25.980 --> 0:16:28.080 with you too much. And it's especially hard if you 0:16:28.080 --> 0:16:31.830 do work from home as a self- employed person. Having 0:16:31.830 --> 0:16:34.710 that separation between your work life and your personal life 0:16:35.130 --> 0:16:37.860 is more important than ever as you go along because 0:16:37.860 --> 0:16:40.350 actually that is what's going to allow you to come 0:16:40.350 --> 0:16:43.020 to work, bring your best self, do your best work, 0:16:43.230 --> 0:16:44.310 and show up for the client. 0:16:44.520 --> 0:16:48.510 Absolutely. And I think there's something around creating that separation, so if you 0:16:48.510 --> 0:16:50.760 do work at home, maybe trying to be as rigid 0:16:50.760 --> 0:16:52.890 as you can in terms of your working hours, you 0:16:52.890 --> 0:16:55.740 cut off at a certain point. Understandably, there are times 0:16:55.740 --> 0:16:58.140 where you have to work later, but trying to create 0:16:58.140 --> 0:17:00.840 something that draws a line between the two, so it's 0:17:00.840 --> 0:17:01.470 in and out. 0:17:02.010 --> 0:17:06.570 I have my home office and when I close the door on it, that's the 0:17:06.570 --> 0:17:09.511 signal to myself to leave it behind and to relax. 0:17:09.511 --> 0:17:10.080 Absolutely. 0:17:10.650 --> 0:17:13.350 There's been some great advice here, Crystal, but if there 0:17:13.350 --> 0:17:16.500 is just one thing that you would like viewers and 0:17:16.500 --> 0:17:19.380 listeners to take away from this episode, what would it be? 0:17:19.440 --> 0:17:22.830 I would encourage people to really understand where they are 0:17:22.830 --> 0:17:26.129 financially. And what that means is, do you have savings? 0:17:26.130 --> 0:17:29.700 Have you got a buffer? And understanding, well, how much 0:17:29.700 --> 0:17:32.580 do I need to have coming in every month to 0:17:32.580 --> 0:17:34.859 be okay? And I guess the follow- up would be 0:17:34.859 --> 0:17:38.010 around the insurance piece maybe if that's needed for you. 0:17:38.160 --> 0:17:40.530 But that cash piece is the biggest bit because if 0:17:40.530 --> 0:17:42.150 you think about it, if you don't have that sorted 0:17:42.150 --> 0:17:44.340 and you've got bills to pay, you end up having 0:17:44.340 --> 0:17:47.340 to borrow and that can send you in the wrong direction. 0:17:47.790 --> 0:17:50.369 Build up your buffer. Brilliant advice. Thank you, Crystal. 0:17:50.369 --> 0:17:51.000 Thank you. 0:17:52.710 --> 0:17:55.199 That's it for today's conversation. I really hope that you're 0:17:55.200 --> 0:17:58.140 walking away from it with a bit more clarity and 0:17:58.470 --> 0:18:01.470 importantly, a few practical ideas to put in place so 0:18:01.470 --> 0:18:03.990 you can enjoy all the perks of being your own 0:18:03.990 --> 0:18:06.960 boss. If you found this episode helpful, please do share 0:18:06.960 --> 0:18:09.270 it with someone else who's self- employed and might be 0:18:09.270 --> 0:18:12.389 struggling with the same challenges and help them get a 0:18:12.390 --> 0:18:14.820 little bit richer too. This podcast is brought to you 0:18:14.820 --> 0:18:16.710 by L& G. You can keep up with the show 0:18:16.830 --> 0:18:21.150 on YouTube, TikTok and Instagram @ legalandgeneral. And if you've got 0:18:21.150 --> 0:18:23.369 a question or a topic that you'd like answered on 0:18:23.369 --> 0:18:25.800 the show, you can get in touch on our socials. 0:18:26.190 --> 0:18:28.950 Until next time, see you soon and thanks for listening.