Quite often, as sole proprietors, we have the tendency to want to spend what we bring into our accounts. Yes, even someone as disciplined as myself still sees the cash in the account and the desire to travel makes me want to spend what is not really mine.
Nova Scotia has the highest tax rates in Canada. We have all heard about it. Check out the information from the CRA website by clicking this link: https://www.taxtips.ca/taxrates/ns.htm
Unless you are a registered corporation, you are on your own to ensure you have paid your CPP and taxes. My clients often ask me what is the best way to ensure they don’t spend this money but still have it accessible in case of an emergency. Well, I am certainly not a financial planner but I do find that taking the money out of the account and not visually seeing it each time I log it a big help. A saving account in another bank separate from the normal bank you have or a Tax-Free Savings Account (TFSA) are the places I prefer to “store” the money.
Often your accountant or the person completing your income tax return can give you an idea what the next year’s tax bill will look like based on your projected income and expenses. Use this as a guide for how much you should be setting aside each month.
This still doesn’t work for you? Go see a financial planner. It means you need a cash flow plan done up so you are only spending within your means! Trust me, you will thank yourself for it. You can do this!