How to save for the future when you’re self-employed

January 02, 2018

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We tend to think of people who are self-employed as small business owners or freelancers, but the definition of being self-employed is actually a lot more encompassing. Doctors and medical professionals are often technically self-employed. Ditto for people like farmers and fishers. Not to mention realtors, mortgage brokers, consultants, and anybody else who provides contracted services to larger organizations. 

While being self-employed can mean lots of different things, one thing everybody who is self-employed does have in common: The financial support systems that can come from working for the proverbial “man” often aren’t in place. 


Take payday for instance. When you work for someone else, chances are you know when exactly you can expect your paycheck and the amount that will be on it. When you work for yourself, typical payroll deductions like taxes or your CPP contribution are your responsibility to calculate. And that company pension plan? That’s on you, too.

But with a little bit of planning, it’s entirely possible to not just save for the future when you’re self-employed, but to ensure your financial future is solid.

Think beyond RRSPs.

Chances are, when you think retirement savings, RRSPs are usually what come to mind. While RRSPs can certainly make sense for the self-employed among us, they’re not always the best option. Depending on your income, how much you’re investing back into your business, your business structure (whether you’re incorporated or not), and a variety of other factors, an RRSP might actually not make the most financial sense for your situation. In some instances, a TFSA might make more sense, or a combination of several different things. It’s important to find a trusted financial expert who can help you weigh the pros and cons for your unique situation.

Budget, budget, budget.

When you’re self-employed, the notion of a “steady paycheque” might look a little different. When you get paid—and how much—can often vary from month to month. While this can make it tough to schedule regular pre-authorized contributions to your savings, it doesn’t mean you can’t still pay yourself first. Think of your long-term savings like any other bill. Determine a regular amount that makes sense for you and your budget, and then pay it like you would your phone bill, or car payment, or any other monthly expense. In leaner months, a little bit can still go a long way. And for those times when your income is a little higher than normal, the more the merrier also applies.

Call in the big guns.

Don’t be afraid to ask for help from the experts. Find a trusted tax-professional who understands your situation and can help you navigate all the complexities that come with being your own boss from a tax-perspective. It’s also helpful to have a trusted financial expert. Where your tax advisor can show you how and where to save that money, a financial expert can show you how and where you can invest it.