Student Loan

The fantasy of being self-employed can be alluring. Setting your hours and creating opportunities for a larger paycheck, which is ultimately derived from your hard work, can be a great fit for many people.

FreshBooks, a company that specializes in basic accounting software for the self-employed, has noticed a growing trend across the nation. According to FreshBooks’ annual Self-Employment Report, millions of workers in the U.S. are happily leaving corporations and becoming self-employed. Their report finds that 27 million Americans could be leaving traditional work in favor of self-employment by 2020. This shift would triple the current population of full-time self-employed professionals, bringing the total number of workers to 42 million.

Moreover, the report added that this revolution in how Americans work would only grow in the future.

Yet taking the risk of leaving a steady paying job to start a business can be intimidating, especially when considering the personal expenses that it takes to keep a decent amount of cash flow while still being able to pay the bills, and yourself, on a monthly basis to cover things like a mortgage, vehicle payment, or student loan.

One of the biggest challenges in starting and managing a new business is cash flow – the sequence and timing of when payment arrives and when it goes out the door to pay for business expenses. This includes, of course, paying your salary. A U.S. Bank study found that as many as 82 percent of startups and small businesses fail due to poor cash-flow management. So, whether you’re self-employed, or still working a traditional job, income must arrive before bills are due in order to stay afloat.

One of the many pitfalls small business owners fall into, especially in the early days of owning a business, is the misuse of write-offs and deductions. In other words, getting into the mentality of: “It’s OK, the business can pay for that.” Yet this can add up to be a bigger cash drain than most people realize. As a solution, some self-employed small business owners have turned to loans or lines of credit – if they can qualify, but adding yet another loan to an existing stack of loans and bills can make a stressful situation downright nerve-racking.

So the issue of cash flow really can make taking a client out to lunch or grabbing a bite to eat with friends or family a tough financial decision. It can even be a major financial burden if you’re nearing the end of the pay period, are short on cash, or have a loan payment due in a couple of days. So when you find yourself with a low balance in your bank account between pay periods, this is when you have to start choosing between developing and maintaining your business and personal relationships or saving money by staying home.

Moreover, if you have to stay home, hopefully, your electricity bill isn’t on the list on the list of things stressing you out. According to, except Hawaii, where just about everything is more expensive, most energy consumers only spend 1-2% of their income on electricity, but there are times when people who are living paycheck-to-paycheck or on a fixed-income have to a bigger percentage of their income to afford their energy bills. While some people can afford a $30-$40 increase in their electric bill, many people can’t. You can check out their formula and rankings in how they determine average state income, energy use and the percentage consumers pay at

So while you might be stressed about the bills and loans you have to pay off. Hopefully energy isn’t one of them. That means having a thoughtful conversation about not only what you use and how you use it but making sure local leaders are making good choices about how we as consumers get access to energy.