March 12, 2019 Freelancer en_US Personal finance challenges like saving for retirement are all too common for self-employed workers according to a new survey from QuickBooks. Personal finance struggles of self-employed revealed in new survey

Personal finance struggles of self-employed revealed in new survey

By Kim Harris March 12, 2019

If there’s one thing self-employed workers think about more than their businesses, it’s their personal finances.

When QuickBooks Self-Employed surveyed 1,026 self-employed people throughout the U.S. for its 2019 Personal Finance Survey, 1 in 3 admitted to always thinking about their personal finances, 2 in 3 said they think about personal finances at least once per day, and 4 out of 5 said they were financially motivated to become an entrepreneur.

These numbers might be unsurprising when you consider the top financial motivator respondents credited to their self-employment: the promise of making more money by working for themselves. Other motivators included building their personal savings, earning additional spending money, becoming self-employed out of necessity, and paying off debt.

Personal Finance Survey 2019

Out of the 1,026 self-employed people who took part in the survey, almost two-thirds (64%) of them said they prioritize their personal finances over their business finances — and this seems to have worked out well for them. This cohort also reported that self-employment has had a positive impact on their personal debt, savings, credit score, earnings, and investments.

Which is a higher priority for you?

Asked what impact self-employment has had on their earnings, investments, personal debt, credit score, disposable income, savings, and expenses, most reported a favorable outcome.

According to the data, your personal debt is more likely to go down than up when you become self-employed and your investments are more likely to go up than down. The biggest reported improvement is to earnings, with 50% saying they earn more money now they are self-employed.

How have the following changed since you started working for yourself?

Cash flow woes

While the survey points to some significant financial benefits of being self-employed, there’s no doubt that working for yourself can be a challenge at times, to say the least. According to those who do it day in and day out, here are the top three personal financial challenges:

  1. Adapting to the cost of living
  2. Inconsistent cash flow
  3. Too many expenses

84% of the self-employed workers who took part in the survey reported having cash flow problems at one point or another, but only 19% say they always or often do. Meanwhile, according to the data, self-employed workers who pay themselves a salary are less likely to experience cash flow issues. More than half (54%) of “salaried” self-employed rarely or never experience cash flow issues — suggesting those who put aside a specific amount of money for themselves experience fewer personal financial challenges.

Dialed in and stressed out

Personal financial strain is no doubt stressful, especially if you’re super-focused on making your business profitable. 23% of the self-employed people surveyed say they experience a great deal of stress with cash flow problems, and 5% say the stress is enough to make them want to quit.

How much stress do you experience when you have cash flow problems?

The survey reveals that experiences counts for a lot when it comes to handling stress related to personal finance and cash flow challenges. Indeed, as you might expect, self-employed people with 10 or more years of experience were found to be less worried about cash flow problems than those with less than a year of experience.

Do you have a budget for your personal expenses?

Personal budgets seem to be problematic for many self-employed people, simply because cash flow is inconsistent. In fact, this is the top reason self-employed workers said they don’t have a budget. Overall, 56% of the self-employed workers surveyed who don’t have a budget say it’s because they experience inconsistent cash flow.
While more experienced self-employed workers are better at handling the stress of personal finances, according to the data they are less likely to stick to a budget than their less experienced counterparts. But those who say they pay themselves a salary are more likely to have a budget and stick to it.

The top three reasons self-employed workers don’t stick to their budgets:

  1. Unexpected expenses
  2. Inconsistent cash flow
  3. Too many things they need

Self-employed healthcare benefits

Without strong budgets, some self-employed people find it difficult to pay for personal needs like insurance. According to the survey, self-employed workers most commonly forgo vision coverage.

1 in 4 self-employed workers do not have health insurance

Asked which types of insurance they have, the self-employed people who took part in the survey replied as follows:

  1. 76% have health insurance
  2. 57% have dental insurance
  3. 50% have life insurance
  4. 49% have vision insurance

Almost half of self-employed have no retirement savings

They survey also asked self-employed workers about their personal savings and retirement plans. This revealed that many prioritize personal savings ahead of retirement savings.

  • 45% have no retirement savings at all
  • 19% have an IRA
  • 16% have a 401K
  • 12% will use personal savings
  • 8% have other retirement savings

A quarter of self-employed workers surveyed say they have $50,000 or more in savings, while another quarter has less than a $1,000. 17% said they do not have any personal savings.

How much do you have in personal savings?

Retirement a distant dream for some

When it comes to retirement, the suggest indicates that fewer than 30% of self-employed people are confident they will retire, with 14% saying there is no way they will ever retire and 13% saying they don’t want to retire. And, as we’ve seen, few are contributing to a retirement fund.

Are you contributing to a retirement fund?

According to the data, those with more experience being self-employed are half as likely to desire retirement than less experienced counterparts.

How confident are you that you will be able to retire?

Interestingly, when asked whether they can afford to retire or not, the respondents’ level of experience had little to no influence. Just as many “experienced” self-employed people (i.e. those with 10 or more years of experience) said they can’t afford to save for retirement as those with less experience (54% and 53%, respectively).
What’s behind the lack of planning for retirement? The No. 1 reason self-employed workers aren’t contributing to retirement is they can’t afford it.

Personal debt a problem for some

While many self-employed workers started their own businesses with the hopes of finding more freedom and independence, that doesn’t mean their personal finances followed suit. 1 in 4 self-employed workers has $50,000 or more in personal debt, and more than half are at least $5,000 in debt. The good news is 23% say they’re debt-free.

Even still, personal debt is more common than business debt among self-employed people. 41% said they have no business debt.

How much personal or business debt do you have?

A bad credit score can hold you back

While debt is prevalent among self-employed people, 22% of self-employed workers don’t know their credit score, and they feel the impact of their personal finances (whether positive or negative) most when it comes to getting a loan. 1 in 4 said their personal finances had a positive impact on their ability to get a loan, and another 23% said it had a negative impact. Purchasing equipment was the second most common way personal finances impact self-employed workers.

Have your personal finances ever affected your business?

When it comes to credit, self-employed workers who say they pay themselves a salary tend to have a better credit score, according to the survey. 49% of the salaried group said their credit score is over 700, compared to the 35% of the non-salaried group.

What is your current credit score?

In summary, according to the survey data, bad credit means self-employed workers are more likely to:

  • Have less money in savings.
  • Have more debt.
  • Have no budget.
  • Be self-employed out of necessity.
  • Have cash flow problems.
  • Experience increased stress.
  • Be less confidence in their ability to retire.
  • Be less likely to contribute to a retirement savings plan.

Is self-employment worth it?

Despite the stress of personal financial instability that often accompanies self-employment, the majority of self-employed workers (76%) agree that self-employment affords them the lifestyle they want.

And those self-employed workers who say they “pay themselves a salary” are over 20% more likely to think of self-employment as a means live the lifestyle they want. Despite the struggles and stress of working for themselves, nearly 1 in 3 self-employed workers say the freedom makes up for the stress they experience as a result. And more experienced self-employed people are more likely to see the freedom as worth it than inexperienced self-employed workers. But that’s not the story for everybody. 1 in 5 still says freedom rarely or never makes up for the stress.

Does the freedom of self-employment make up for the stress?

With the freedom and responsibility that comes with self-employment, much of the self-employed workforce has to increase focus on their personal finances, even if that means tightening a budget, working toward better credit, and making a better plan for retirement.



QuickBooks Self-Employed surveyed 1,026 self-employed people throughout the U.S. in February 2019, using a 26-question survey. The sample was selected and contacted by Pollfish.


QuickBooks Self-Employed welcomes the re-use of this data under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original source is cited with attribution to

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Kim Harris is a copywriter and blogger for TSheets by QuickBooks. When she’s not writing about new ways time tracking and scheduling save business owners time and money, you’ll find her reading, dining, or plotting her next adventure. Read more