ben_fisher•1mo agoMost Upvoted

I finally figured out why my savings account never grew after 7 years of freelancing

Turns out I was treating my bank account like a checking account and just spending whatever was left after bills each month. What finally tipped me off was when my accountant asked why I had $12,000 in business expenses on a credit card but only $300 in savings after a great year. Anyone else make it years before realizing you need to pay yourself first?

3 comments

3 Comments

the_hayden1mo ago

Took me 3 years to realize I was paying my credit card minimums while my savings sat empty. Felt real dumb when I finally did the math.

shane1701mo ago

Is it really that big of a deal though? Putting money in savings while you have credit card debt just means you're losing money on interest every month. Sounds like you got a free lesson in how compound interest works, which is probably worth more than the couple hundred bucks you missed out on.

perry.jesse1mo ago

Nobody's talking about how the tax stuff works with this. If you've got a good year and don't set aside money for taxes, the IRS will come after you hard. That $12,000 in business expenses might mean you owe more than you think. I learned that lesson the hard way when I had to pull from savings to pay a surprise tax bill, only I didn't have any savings left.