Written by Taking the leap into self-employment can be scary, but it can also change lives for the better. Many self-employed people talk about how their job offers them a sense of purpose and fulfillment that evaded them when they worked for someone else, not to mention the more logistical benefits of being your own boss and setting your own hours.
Still, if you’re used to a regular paycheck, adapting to the hustle can be a bit of a learning curve. Identifying which financial goals and milestones to look out for can be one way to create a roadmap in an unknown landscape, providing reassurance that you’re going the right way.
Four common milestones for self-employed people — and how to achieve them
Every business and every entrepreneur is different, but most have certain financial realities in common. No matter your venture, here are four common milestones to keep your eyes peeled for — and some helpful hints for increasing your odds of meeting them.
1. Covering your expenses
It’s just true: You have to spend money to make money. And when you first start out, there’s a good chance you’ll spend more than you earn for a while.
But one of the first financial benchmarks you can look forward to meeting as a freelancer or entrepreneur is earning enough money to cover your monthly overhead expenses.
Of course, that figure will vary considerably depending on what kind of self-employment you’re undertaking. For a freelance writer, overhead expenses might amount to little more than an internet connection (which is cool, since you were probably already paying for one — and now it’s suddenly an expense you can deduct from your taxes). If you’re hoping to upgrade your cottage baking business to a commercial endeavor, your expenses might include renting an industrial kitchen, not to mention ingredients, packaging and possibly even labor if you hire help.
Either way, it’s worth calculating your overhead expenses. It will not only help you come tax time, but it’ll also give you and your business an early financial goal. When you’re just starting out on an exciting but scary new venture, earning enough to cover your bases can feel like a major step in the right direction.
2. Getting “in the black”
Once you’ve picked up enough steam to be solidly up and running, the next goal you’ll likely have is to be able to pay yourself.
As an entrepreneur, you probably know the phrase “in the black.” It comes from the days when bookkeepers did their jobs with plain old pen and paper. Available money — such as revenue or profit — was written in black, whereas expenses or debts owed were written in red. (Frankly, it’s not ancient history: Many contemporary accounting software programs use the same color code.)
For most people, the entire purpose of being self-employed is to earn a living, one that doesn’t rely on building someone else’s dream. So after covering your business expenses, a good second goal is to cover your living costs, which, again, first means totaling them up.
If you don’t yet have a budget, there are plenty of easy-to-use online programs that can help you make one for free (and seamlessly incorporate your existing bank, credit and loan accounts so you can see how things change in real time). But simply totaling up your monthly fixed expenses (like housing, insurance premiums and installment debts), as well as variable expenses (like food, utilities and entertainment) can help you understand exactly how much you need to be earning to support yourself.
3. Looking toward the future
Now that you’ve got the basics handled — a feat well worth celebrating — it’s time to consider how you can pay into your future. If you’re barely making ends meet, even your wildest self-employment dream-come-true won’t feel liberating and exciting; it’ll feel like a constant grind, a game of catch-up.
For starters, there’s the importance of stashing an emergency fund, a financial goal that some 42% of Americans, according to a 2025 U.S. News survey, have yet to accomplish. Entrepreneurs especially may find themselves in a tough position if they’ve robbed their savings accounts in service to building their businesses — to the detriment of having any cash left over when things go south.
Making a point to funnel a certain amount of every paycheck toward a savings account until you have a cushion large enough to cover three to six months of expenses is critical, even if the signature on the paycheck is your own. (Good thing you calculated your monthly expense total in the step above!)
Along with an emergency fund, you should also make it a goal to pay your future self in the form of making retirement contributions. Depending on the structure of your business (and how much you can afford to funnel toward this long-term goal), using a SEP IRA or Solo 401(k) might help you maximize your contributions, but even maxing out a traditional IRA or Roth IRA can go a long way with compound interest.
4. Making it sustainable
Once your business is up and running — a list of clients, a reliable demand for your supply — you can enjoy the ultimate financial goal of such an endeavor: making it sustainable. Finding ways to incorporate passive income generation into your business model can help it feel all the more liberating and exciting, along with ensuring your cash flow keeps, well, flowing.
One benchmark to look forward to with time: out-earning your W-2 self. The first time you see an annual revenue total that’s higher than any salary you’ve ever earned, you’re sure to feel pride — but also, motivation to keep going. That’s the kind of positive cycle you’re looking to build when the product is as important and singular as your dream.