When you leave a job to work for yourself, you think about the obvious things. No salary. No sick pay. No holiday. Everyone warns you about those.
What nobody mentions is the stuff that was running in the background without you.
Employment does a quiet, mediocre, entirely adequate job of managing your money on your behalf. Tax comes out before you see it. In the UK, you’re enrolled in a pension automatically, and your employer puts money in whether you engage with it or not. It’s not a good system, particularly. But it runs without you, and it produces a result.
The day you go self-employed, all of that switches off at once. No announcement. No letter. It simply stops, and the only person who will ever notice is you.
What actually disappears
Three things, and they go together.
The tax handling goes. You now owe money you’ve already got, which is a harder mental job than it sounds. Money in your account feels like your money. Most of it is, but not all of it, and the difference has a deadline.
The retirement default goes. This is the one that costs the most and hurts the least at the time, because nothing bad happens. Nothing happens at all. That’s the problem. Ten good years of earning online with nothing put aside is ten years of compounding you don’t get back, and you won’t feel a single day of it going missing.
And the enforced boredom goes. A workplace pension is dull by design — money goes in every month, you can’t easily fiddle with it, and the not-fiddling is most of why it works. Working for yourself, everything is optional, including the sensible bits.
Nothing in your finances will break loudly. It’ll just quietly not happen, for years.
The bit where people go looking for a professional
The obvious response is to find someone to hand it to. You’re busy building a business, this isn’t your area, so pay an expert.
That instinct is reasonable and I’m not going to sneer at it. But it’s worth knowing what you’re buying before you buy it, because the fees involved are usually quoted as small percentages and small percentages are extremely misleading over a couple of decades. A charge that sounds trivial each year does not stay trivial. It compounds against you exactly as your returns compound for you.
Some people genuinely need advice — complicated tax positions, multiple businesses, estates with moving parts. If that’s you, get it.
But if your situation is “I earn money online and I’d like some of it to still exist in twenty years,” that’s not a complicated problem, and it doesn’t need to be expensive. I’ve written up why you probably don’t need a financial adviser on my investing newsletter, which covers what advisers actually do, what it costs, and when it’s worth it.
Again, my bias is on the table: that’s my newsletter, and it’s aimed at UK readers. It’s also free, and it’s not personal financial advice — it’s an account of how I handle my own money.
What I’d actually do
Nothing here needs a spreadsheet.
Separate the tax money the day it arrives. Second account, moved automatically if your bank will do it. The point is to never see it as spendable.
Set up one recurring payment into something long-term, and make it small enough to survive a bad month. The amount matters much less than the fact that it happens without a decision each time. You’re rebuilding the automatic bit that employment used to do for you, and automatic is the whole feature.
Increase it when the site has a good year, and never decrease it in a good year. Good years are when this gets done. There won’t be a more convenient time and there won’t be a moment when you feel ready.
Then leave it alone. This is the hardest part for people who build businesses, because building businesses selects for exactly the sort of person who wants to optimise things. Don’t optimise this. Optimise the site — that’s where your actual advantage is.
The honest summary
You don’t need to become interested in finance. I’d rather spend my time on keyword research than on fund factsheets, and I suspect you would too.
But you do need to accept that the job got handed to you the day you started working for yourself, and it isn’t going to hand itself back.
Doing something obvious and boring, starting now, beats doing something clever later. It isn’t close.
Where to go next
What to do with the money when your site starts earning — the practical order of operations for online income.
12 Proven Passive Income Ideas — if you’re still building the income side.
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