Working in the camming industry is no different than any other job in today’s gig economy, at least when it comes to earnings.
In this industry, there is no “regular” paycheck, and your earnings are largely based on how much time you put into your work and how many customers you can attract. This means that you can expect your income to ebb and flow over the course of time.
However, regardless of the inevitable ebb and flow of your finances, money considerations on the other side are pretty predictable. Whether you work full-time or part-time, whether you’re having a slow month or the best earning day ever, there are certain expenditures you’ll want to account for each time you receive a payout. This will help you avoid any surprises later.
Editor’s note: The following basic tips are for thought-provocation only. We are not financial planners or professionals in any way. Make sure to consult with a qualified person for suggestions, advice and guidance.
Cam models are considered 1099 Independent Contractors in the United States. As such, no taxes of any kind are withheld from earnings paid to you.
Each time you receive any earnings, you should put aside a portion to cover taxes. The IRS has multiple tax brackets that are broken up by annual earnings and whether you’re single, married, married filing separate or head of household. These brackets dictate tax rates from 10% up to 37% based on annual income.
Depending on where you fall in those brackets, that’s how much you’ll want to set aside for federal taxes. In addition, you’ll want to check the tax rate for the state you live in, so you can put aside funds to pay those taxes at year end.
If you are located outside the US, make sure to check your local laws pertaining to taxes — because taxes are pretty universal. How they are handled, though, varies widely.
Financial advisors often suggest people have a savings account to help weather any unexpected expenses — things like medical expenses, loss of income, emergency car repairs, etc. The suggested amount to have in “liquid cash” (meaning funds not tied up in stocks, bonds, real estate) should be enough to cover three to six months of living expenses.
One “guidance goal” is to put away at least 10% of any earnings you receive into a regular savings account.
Retirement, what?! Yes, you may be young and feel that retirement is a long way off. The years fly by swiftly though, and your older self will thank you for being responsible enough to prepare well in advance.
The great part about saving for retirement is that there are saving options that allow you to put way money now that will reduce your taxable income. One option is a traditional IRA. Typically, the money you put in this account is not taxable until you withdraw the funds later in life. Keep in mind that you can still withdraw money from an IRA before retirement, but there are tax consequences and penalties.
Check with your tax professional to discuss the best strategies for your situation.
This is another expense that should included in any budget. Just a single trip to a hospital these days can run over $10,000 for something “simple” and non-life threatening. There are many brokers who will help you sort through the all the different options for your area and help you choose a plan that’s best for you.
If you consider just these simple tips, you should find yourself feeling less and less stressed about unexpected emergencies. With proper planning, you’ll be better prepared to face any financial obstacles you may encounter in the future.
Gabriella Vita is from Las Vegas, NV and has been writing for over ten years under multiple pen names. She believes variety is the spice of life, which is why she enjoys writing on a plethora of subjects. Email her at email@example.com.
Background header image via Unsplash here.