E110 - Handling Money


 Joanna: When it comes to side hustles or building your own business. Something that I'm learning right now. I'm on a steep learning curve about is the money side of it. I mean the accounting the taxes the finances of managing all of that. So James I'm looking to you today to give us some tips on that.

James: Alright Jo. It's also a journey that I've been on and in the past year I went from trying to do it all myself and doing a very poor job to hiring someone to do it for me. And that is the biggest thing when you're gonna start doing a side hustle if you're going to do any kind of work where you make money outside of a full time job. It might be time to start considering someone who knows what they're doing to help you out.

Joanna: An accountant.

James: An accountant because basically what happened for me is I got to the point where I just had this feeling like I wasn't doing everything that I should be doing and I didn't want. In Canada we had the CRA but in the States it's the IRS. My my biggest fear was years down the line them coming to me and saying you owe this chunk of money.

Joanna: You know, Fifty thousand dollars.

James: And you've heard we've all heard those stories of people who owe money in back taxes and they didn't know it and they didn't realize for years and years that they weren't doing things correctly or making mistakes. And it was all just piling up on them. And so that's the biggest thing especially for contractors or doing a side hustle is you're going to get taxed differently and so it's important to know when you don't know enough right. So there's all there's some great apps out there there's an app called Wave apps which is great for financing doing your own finance stuff on the side. There's also fresh books there's quick books there's lots of different software that help you out along the way but when you get into the world of doing side hustle which is often a lot of Internet based stuff there's lots of different rules based on what country you live in and what state you live in and whether or not we're selling within the state and outside of states.

Joanna: Where the customer is.

James: There's all these different things and that's where it might be important to get a professional on your side to help out with. And even for you Jo like you're starting to enter this world like you need to know like how much money should I be saving every time I do a contract for someone for taxes at the end of the year. Because yeah it would be nice to just every time you charge X amount of dollars to be able to use X amount of dollars.

Joanna: That's all my money.

James: But you actually have to you know set aside things so a good rule that I learned is the rule of thirds right as you said a third aside for taxes. You use a third to pay yourself and you use a third to put on your expenses for the business. So if you need space if you need software if you need things like that. So the rule of thirds is one that I learn and it's not as your business grows it changes a little bit. But in general in Canada you need to save a third for taxes so it's all important things to know and if you're not already doing it then I would advise you to at least ask someone. Absolutely.

Joanna: I mean it is true. Like I it's something I'm not strong. The irony is I have my undergrad I did all these accounting courses because I did this business degree but my focus was more on the marketing side. So I had to do basic accounting to get my degree and as soon as those courses were done I basically wiped almost all of that content from my brain. That's just the truth. I don't know a lot about it. And so you know to be the expert at everything that's where like even earlier when we're talking about a couple of days ago collaboration maybe that's something if you feel like you maybe don't have a way to afford all the financial help you need but you'd love to sit down with someone maybe you can do a swap with them. Maybe there's some skill that you have and they're an accountant who is an expert at this and you're going to help them make great looking business cards and in exchange they're going to give you an hour and a half or a couple hours of their time to advise you on the accounting for your business. There are some probably some creative solutions to finding answers. But the important thing is we're trying to get across today as to not neglect it. We want to and as we always say like even as Christians that integrity piece is huge. We want to be honest. We want to do business right. I think God really honors that when we do it with integrity and paying taxes. Jesus said Give to Caesar what Caesar so pay. Pay your taxes and keep good accounts. Keep all those receipts. All that kind of stuff. And so many tools these days now even for that kind of stuff as James you've mentioned in ways to keep your receipts and all that kind of stuff digitally so there's no excuse. We just need to commit to doing it so that we don't get caught up in it later.

James: All right. So Joe I mentioned some apps but what we would really like to know is what you're using out there. Tell us some ways that you're managing your finances and hopefully we don't get many I just write them on a piece of paper and stick them in a drawer kind of thing. Yeah. Give us what you're using and if there's something that we've never heard of we would love to know about it and we might actually put it in the show notes or we talk about the next time we get around to talking about money for the side hustle again.