Starting your own business is a major milestone. But once you begin paying yourself, the next step can feel unclear. Many new business owners don’t have a plan for what happens if their income drops or stops. Without a personal safety net, a slow month or a single emergency could create lasting damage.
If you’ve recently started drawing a salary from your business, now is the time to set up protection for your personal finances. That means having cash for emergencies, saving consistently, and preparing for taxes or unexpected costs. This guide will help you understand what a personal safety net looks like and how to build one that supports your life outside of work.
Start with a Simple Personal Budget
Before you can protect your money, you need to know where it’s going. A budget helps you track what you earn, what you spend, and what you can save. As a business owner, your income may vary from month to month. That makes it more important to keep a personal budget—not less.
Start by listing your fixed expenses like rent, utilities, and loan payments. Then look at flexible costs like groceries, gas, and spending on entertainment. Next, compare this to your income from the business. If your income changes often, use a conservative estimate based on your slowest months.
At this stage, one of the most common questions is, how much should you save per paycheck, but there’s no universal answer. It depends on your goals, your income, and your cost of living. But once you’ve seen your numbers on paper, you’ll have a better sense of what’s realistic and sustainable for your situation.
This snapshot will show you how much room you have to save and where you may need to adjust your spending. A personal budget is not just about cutting back—it’s about making clear and confident financial choices.
Set a Realistic Salary for Yourself
It can be hard to decide how much to pay yourself, especially when your business is still growing. But waiting too long to take a paycheck or changing the amount every month can make personal planning difficult. A steady salary, even if small, gives you a starting point for saving and spending wisely.
Choose an amount that allows you to cover your living costs without putting too much strain on the business. You don’t need to match your old job’s salary right away. The goal is to create a habit of paying yourself regularly. This stability helps you plan ahead and build savings—even if you increase your pay later.
Understand How Much to Save Per Paycheck
Once you have a steady income, you’ll want to decide how much to save from it. Many financial experts suggest saving 20% of your take-home pay. But that number doesn’t work for everyone. What matters most is that you save something—and that it happens often.
Start by asking what you’re saving for. An emergency fund, retirement, and future goals all need attention. If you’re not sure where to begin, try saving a fixed amount—like $100—from each paycheck. Or use a percentage, such as 10% or 15%, if your pay changes.
The point isn’t to reach a perfect number right away. The goal is to create a habit of saving that fits your current situation and grows over time.
Save Separately for Taxes
Unlike a regular job, your taxes don’t get withheld when you pay yourself as a business owner. That means it’s your job to set that money aside. If you don’t, you could end up with a large tax bill and no cash to cover it.
To avoid problems, save a portion of each paycheck for taxes. A good starting point is 25% to 30% of your net income. This may seem high, but it helps cover both income tax and self-employment tax. Open a separate savings account just for this purpose and treat it like a non-negotiable expense.
Planning for taxes now makes tax season a lot easier—and it keeps your personal finances safe from big surprises later.
Protect Yourself with Basic Insurance Plans
Running a business is a risk, and that risk can affect your personal finances too. If you get sick, hurt, or lose income, it could be hard to keep up with bills. That’s why personal insurance is an important part of your safety net.
Start with health insurance. Even a basic plan is better than nothing. Without it, one unexpected medical cost could wipe out months of savings. Disability insurance is also worth considering. It helps replace your income if you’re unable to work for a while due to injury or illness.
If others depend on your income—like a partner or child—you may want to look into term life insurance as well. These steps may not feel urgent now, but they protect your financial stability in the long run.
Make Room for Retirement Planning Early
It’s easy to delay retirement savings when your business is new. But waiting too long means you’ll have to save more later. The earlier you start—even with small amounts—the better your future will look.
If you’re self-employed, you have options like a SEP IRA or a Solo 401(k). These accounts let you save for retirement and lower your taxable income at the same time. Even if you start with $100 a month, you’re building the habit and creating long-term security.
It’s also a smart move to increase your savings when your income goes up. Don’t wait for the “perfect time.” Just start with what you can, and build from there.
Check In on Your Finances Every Few Months
Your first savings plan won’t be your last. As your income changes and your goals grow, you’ll need to update your approach. That’s why regular financial check-ins are so important.
Set a reminder to review your budget, savings, and expenses every three or four months. Ask yourself what’s working, what’s not, and where you can improve. Maybe you need to save more for taxes. Or maybe you’re ready to increase your emergency fund goal.
Making time for these reviews helps you stay in control. It also gives you a chance to reset your habits before small problems grow into bigger ones.
Running a business comes with risks, but your personal finances don’t have to suffer because of them. A personal safety net helps you manage those risks without fear. With steady habits—like budgeting, saving, and planning ahead—you can build real stability.
You don’t need a huge income to start. You just need a system that works for your life and a plan that grows with your business. By taking these steps now, you’ll be ready for what’s next—whatever that looks like.