{"id":8399,"date":"2023-03-01T11:41:30","date_gmt":"2023-03-01T11:41:30","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=8399"},"modified":"2025-09-15T17:25:41","modified_gmt":"2025-09-15T16:25:41","slug":"why-money-management-and-tax-go-hand-in-hand","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/blog\/why-money-management-and-tax-go-hand-in-hand\/","title":{"rendered":"Why money management and tax go hand-in-hand"},"content":{"rendered":"\n

Money management is central to being able to manage your taxes. <\/p>\n\n\n\n

As we all know, getting your taxes right first time is far from a given, and any help you can get is worth grabbing with both hands. That\u2019s why we\u2019ve teamed up with our trusty partner Money Dashboard to bring you the tips and know-how on why good money management should be your calling in life.\u00a0\u00a0<\/p>\n\n\n\n

And – not to go for the big sell or anything – if you do decide that you need a helping hand, Money Dashboard has a pretty fabulous app to help you stay on top of things. And it\u2019s completely free to download. Just saying.<\/p>\n\n\n\n

What is money management?<\/h2>\n\n\n\n

As you might expect, money management is basically the process of staying on top of your financial affairs. When you\u2019re self-employed, this is even more crucial to do as your professional life can be less financially stable than it is when you\u2019re employed. Bear in mind that you\u2019ll have multiple clients, you may be working for them at varying rates, and each day of work will be different. <\/p>\n\n\n\n

In addition to this, you will have multiple streams of income to manage. And that\u2019s not to mention that you\u2019ll have to keep an eye on splitting up your personal and business expenses as well. With so many things to manage, using software or smart banking tools are advisable. <\/p>\n\n\n

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How can I manage my cash?<\/h2>\n\n\n\n

Here are a few tips that will help you manage your cash through the tax year<\/a>:<\/p>\n\n\n\n

1. Open a business account<\/h2>\n\n\n\n

Splitting your personal and business expenses is crucial. An issue that a lot of first-time freelancers face is that they don\u2019t plan their tax year around doing their tax return. As a result, they end up in January sifting through a lot of receipts and bank statements to remember which spends were which. A quick fix for this issue is to open a business account. You can use it to view all of your self-employed business activity – and if you ensure that you only use the card for your business spending and to receive pay from work, you\u2019ll be instantly organised for the January deadline. <\/p>\n\n\n\n

2. Create spreadsheets<\/h2>\n\n\n\n

If you\u2019re super-organised, you\u2019ll have a business account AND some spreadsheets. But no one is perfect, so if you can only organise yourself with spreadsheets, that\u2019s more than enough. <\/p>\n\n\n\n

We\u2019d recommend starting a spreadsheet for each tax year. Split it into monthly tabs and record your income and expenses into each month. Recording your finances like this is not only useful for having an overview of your business earnings and spending, but it will make collecting it all at the end of the year quick and easy.<\/p>\n\n\n\n

QUICK TIP: Make sure that you note down any descriptions of each entry so that you know what\u2019s what later down the line.<\/p>\n\n\n\n

3. Save like it\u2019s going out of fashion<\/h2>\n\n\n\n

When it comes to your taxes, you\u2019ll be putting around 20% of your earnings aside anyway to pay your tax bill. But why stop there? We all know from the pandemic that life can throw some unexpected things at you, so the more prepared you can be for a range of circumstances, the better. It will put you in good stead to make bigger purchases (e.g. buying a house) and generally is a good way to prevent money from being a major day-to-day stress. <\/p>\n\n\n\n

This is where having an app like Money Dashboard can be useful – enabling you to view all of your accounts in one place. You can use their budgeting tools to ensure that you don\u2019t overspend and watch your savings <\/p>\n\n\n\n

4. Calculate the tax you\u2019ll probably owe<\/h2>\n\n\n\n

Preparation is key, right? Don\u2019t allow your tax bill to hang over you like the ghost of Christmas future. Cut out the element of surprise and calculate what you\u2019ll owe as soon as possible. As a self-employed person, you\u2019ll have to pay Income Tax and National Insurance, depending on how much you earn each year.<\/p>\n\n\n\n

You can use our self-employed tax calculator here by putting in your earnings and expenses to see how much you might owe. <\/p>\n\n\n

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