Money Issues of Being Self-Employed

Chinese would usually like to do business or being self-employed. This is because they can set their own schedule and work from home. You will have more opportunities to increase your income and spend more time with the family.


However, if you are self-employed then you need to consider more on your financial planning. If without a real financial plan in place, you may face a financial disaster in the near future. Here are some concerns that you should address:


There are certain expenses that you would incur in your daily living. But you need to plan your basic monthly commitment. I started my career as a financial planner and my budget strategy is to take into consideration my monthly expenses. I also look into my day-to-day cash flow to identify other expenses that I may not accounted for. Probably I will start with necessities like utility bills, petrol, food then followed by savings.


You need to ensure that your monthly commitment does not burden you to have savings. To play safe, you need to have a buffer fund of at least 6 months salary when you are self-employed. It’s advisable to save the extras since there’re certain months during which we received no income. If you have faced less income or no income for that particular month then you still able to use the extra savings to cover.


The self-employed do not have insurance and medical care. This is because there’s no employer to pay for your healthcare needs and contribute to your retirement fund. Any unfortunate incident could result in a large outflow of money.

Besides, it’s advisable to separate your living and business expenses. Mixing the two will lead you to personal liability if something happens in your business. If you are taking up loans for your business, then it’s wise that you take insurance protection plan so that the bank can go after your personal assets if you cannot pay the loan.

Savings and Retirement

If you do not plan your retirement, you may end up by spending excessively even though you may earn a lot. It’s good that business owner follows a similar model through a contribution to his EPF which makes him more disciplined. Plus, they can get tax deductions for doing so.

4 thoughts on “Money Issues of Being Self-Employed”

  1. No financial security for self-employed? I do know agree.

    First, lets define financial security.

    If you are able to generate sale and income (or able to be productive for something other people looking after) – isn’t that a very good financial security?

  2. Correction:
    “I do not agree.” not “I do know agree”.

    I am building a financial consultancy business – offering protection, saving and investment.

    From time to time, I “invest” in EPF with extra fund, which pays 5% tax-exempted return, not bad.

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