Today I had planned to go Christmas shopping – it’s getting close to the wire! But it started to slush (you know what this is if you live in Vancouver) and after going for a short walk and getting soaked and cold, I decided to leave the Christmas shopping until tomorrow when it’s supposed to be sunny. I can do this as I have my own business which has flexibility in hours. I have had to learn to take breaks and go do something else when work is slowish (it’s never slow – I always have work, but right now no pressing deadlines… I think – I haven’t hired my admin staff yet to confirm this). So I can go Christmas shopping during a weekday when other nine to fivers are required to be at work. This is one of the perks of being self-employed.
When I sat back down at my desk, I thought “I can do anything I want right now” as I had already booked the time off in my head.
What have I been longing to do but have been putting off because of pressing work deadlines?
My own bookkeeping for my own business. Yes, I am one of my worst clients. I throw all my receipts in the drawer next to my desk or leave them sitting in my inbox (which is where most of my receipts are these days). Ok – I didn’t really want to do this if truth be told, but I needed to do this. I started my business a few years ago and as that tends to go, it was a slow start and I wasn’t that profitable. The first year, I had a business loss. As a sole proprietor, I hadn’t paid any taxes during the year (no employer to withhold and remit taxes on my behalf) so when it came to filing my taxes, I had to report my pitiful non-earnings and that was it. I didn’t owe any tax because I hadn’t made any money and I didn’t get any back because I hadn’t remitted any money. It was slightly anti-climatic.
In my second year of business, I actually made some money! That was exciting but also made me slightly apprehensive. Again – I hadn’t remitted any taxes throughout the year as the Canada Revenue Agency does not require self-employed individuals to make tax installments unless they had a balance owing in the previous year or more than $3000. Well, I certainly didn’t have that scenario in my first year of business. So the year went by and I often thought to myself – “I wonder how much tax I’m going to owe next April?” I managed to scrape together some savings to throw into an RRSP and in the end, it wasn’t so bad. I had enough in my savings to pay my tax bill. Phew!
Well, I’m in my third full year of business now and it has actually turned into a full-time job. My hours aren’t nine-to-five but they are at least 40 hours per week. I’ve been paying just enough attention to my billings to know that the “savings” I have been accumulating are not really savings. It’s my tax bill for 2017. But I still look at the balance in my savings account and get this little happy feeling inside. Danger… sometimes I start thinking of all the things I can spend it on and then you know what that leads to? Yup, spending.
So today, as it is close to the end of the tax year for me, I decided to see how much of those savings are actually savings and how much are actually just tax that I haven’t paid yet.
And what did I discover? Yes, it is tax (I think I’m a really good accountant – I know intuitively what the tax rates are as I saved the perfect amount).
I saved the perfect amount for my tax bill.
All the little happy feelings I’d been having about my savings went drifting away and all these negative thoughts came crashing in. The main one being:
“what’s the point of working harder? I’m no further ahead.”
This led to further negative thoughts about everything I had to sacrifice this year and all the hard work I had done to get me to exactly nowhere.
I really am my own worst client. After wallowing in self-pity for about ten minutes I turned it around.
I spent the year doing exactly what I wanted to do.
I had an amazing year where I saw my business grow to a point where it can actually support me and my family as we needed it to this year.
I had an amazing year where I had time to do what I want when I wanted to do it.
I had an amazing year that gave me more “proof” that I can keep living my life the way I want to. Based on experience, my business will continue to grow to support the growing needs that I’m going to have (two sons that are entering their teen then university years!).
Today’s exercise also gave me further evidence that the thoughts you choose to attach to have a profound impact on your life.
So yes, pay attention to your finances as it is important to have clarity about your situation to help you make choices and decisions, but also pay attention to what thoughts are going on in your head. Are your thoughts giving you hope to help you move forward? If not, what can you do about that to change things up to get to that point? Is it time for a year-end check-in?