Financial insecurity, the great problem of the self-employed

When discussing the working conditions of the self-employed, the debate centers on questions such as the possibility or not of enjoying holidays, the number of hours worked per day, bureaucratic obstacles or the pension they receive when they retire. Despite this, the self-employed usually reflect in the different studies that they are happy with their work model. With one but, financial insecurity is the big problem of the self-employed.

We are not talking here about whether they will have a job or not next month. A worker can see how their contract ends or is fired and goes home. Of course he has compensation and a strike to endure while he finds another job. When a self-employed person closes his business, what he usually takes away is debts. And the unemployment of the self-employed if they are lucky and have quoted for it.

We speak rather of the economic ups and downs that suffer, where you can gather very bad months in billing, where they barely have income or do not allow them to cover the operating expenses of their business and their social contributions. Those months it’s time to throw away savings. And this is the big problem for many of them, who do not have enough months to be able to create a sufficient contingency fund.

Of these good months to live in peace you would need to reserve a percentage for the months that we will not have sufficient billing. Also for the time that we are going to be on vacation, for when we have a sick leave, to complement the retirement when the time comes or to face the defaults of our clients.

If this planning does not occur or is not invoiced enough to reserve this percentage what happens is that the month that we do not bill enough accumulate debts and the good thing is to deal with them. This creates a significant financial stress for the self-employed.

In the end it is a matter of having enough income, but also of planning properly . Many freelancers throughout their working lives have had very good times, but they have not known how to save for lean times. This ends many times by expelling them from the RETA and seeking their place as employees.