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I thought it would be fun to update this post exactly 5 years after I originally wrote it…let’s see what’s changed…

The ups and downs of income when you're self employed are so hard to navigate. Here's a solid approach to budgeting in self employment and striking out on your own with a plan in place. I'm glad I'm not alone!

Yes, even though blogging was/is officially paying me more than my day job ever did, I budget in self-employment.  Specifically, I really dislike the idea of irregular paychecks and we strive to make it less stressful.

My Paycheck Plan 5 Years Ago

I had been building up a blogging income account at ING (now CapitalOne 360).  My hope was to get it to $10,000 by the time I quit my day job so I’d have more than enough padding on months that I don’t bring in enough. That means searching for more ways to make money from home.  I made it to $9200 from online business opportunities as of July 15, 2011 and I took it right over the $10,000 mark with the last paycheck I received after giving my 2 weeks’ notice.

I was planning on paying myself a biweekly paycheck directly from this accout so we would never experience a budget crunch at all.  In order for this plan to have worked, I decided to pay myself $1500 every two weeks.

How It Has Worked for the Last 5 Years

I’m going to pat myself on the back because I used the best budget software to track all this stuff.  This plan has been slightly adjusted as our income fluctuated over the last 5 years, but in general, we stuck to this exact setup.  We still have the “Blog Income” CapitalOne 360 account.  It is now padded with $20,000 instead of $10,000 since Mr. BFS is also self-employed now.  We only pay ourselves $1000 from it every 2 weeks instead of $1500 since we earn the rest of what we live on through pet sitting, rental income, and his side hustle of sports officiating.  Overall, this system keeps the fluctuating income of the online world from affecting us much.  I highly suggest just paying yourself a set paycheck instead of trying to live on every cent you can squeeze out of your Paypal account.

Taxes 5 Years Ago

From that biweekly paycheck of $1500, I will be transferring $400 directly into our tax account. We’re using online tax software to track all this stuff.  I know that is only looks like about 27% set aside for taxes, but based on my monthly spending for blogging, it will actually come to about 30%-33% of my profits.  Plus we already throw an extra $150 a month into the tax account just in case there are any nasty surprises in April (now quarterly), which there hasn’t been since we started doing that 4 years ago.  In short, I am 99.9% sure that our taxes are covered with $400 from each of my biweekly contributions.

Taxes in 2016

We still move over money automatically to our tax savings account, but it fluctuates each year based on what we owed the previous year.  Right now, we save up about $1000 a month for income taxes, $1000 a month for property taxes and insurances, about $1000 a month for our Roth IRA’s, and another $1000 a month for our SEP IRA if we can squeeze it in…yeah, there is a reason we make ourselves earn $7000+ a month on average each year.  Running our online business promoting companies with affiliate programs and the pet sitting business at the same time can be exhausting, but worth it for our peace of mind in the future.


Of the $1100 left, it looks like we’ll be spending about $125 with me on my husband’s health insurance plan.  That $125 biweekly should cover my health insurance, dental insurance plans, vision plan, and a basic life insurance policy.  It’s not a fantastic plan – the deductibles aren’t great – but we have enough in our emergency fund to more than cover them.

I will know all of the details for sure in a few weeks.  If I’m right based on last year’s info, then I should have about $975 left out of the original $1500 every two weeks.  I was taking home $970 every two weeks at my day job, so I’ll have a $5 raise!  Woot!  Hahaha.  😉

Leftovers in 2011

In 2011, I was bringing in more than $1500 every 2 weeks.  All of my blog income is transferred into my blogging income account, which I want to keep above $10,000.  If I have paid myself all of my paychecks in a month and there is more than $10,000 left, we divided it up like this:

  • Taxes (30%)
  • Emergency Fund/Savings account (15%)
  • Extra Cash for Investments account (25%)
  • Vacation account (15%)
  • Our two individual Fun Money accounts (7.5% each).

Leftovers in 2016

We actually make less now than in 2011, so our goals are more exact-number and less percentage-based.  If we have extra over the $6000 monthly nut we cover, we usually divide it like this:

  • Taxes – 25% of the extra right off the top and the remaining 75% is split up in the accounts below
  • Emergency Fund – $15,000 if it’s not already topped off (usually already done)
  • Roth IRA savings for the following year – we save the $11,000 a year for our Roth IRA’s the year before so we can fully fund them the first quarter of each year.
  • SEP IRA savings – another $11,000 a year goal
  • Extra Cash for Investments – we start putting the Roth IRA and SEP IRA cash into stocks if we get them fully funded. I found great stocks apps for android that help with this kind of stuff.
  • Vacation account – Extra bits here and there, so it usually fluctuates between $100 and $2500 depending on when we travel.
  • Fun Money accounts – other little bits and bobs but usually we just try not to lose our minds and cover our short-term splurges with the monthly nut.

How do you handle your income and savings?  Any tips or tricks you like?