How I manage my moneyA winter reserve for work that is not busy all year

The seasonal nature of building

When the work is coming in, it is easy to feel flush, but I know the winter slump is always waiting around the corner. With an annual business profit of £35,400, I have to be incredibly disciplined about how much I take out of the business account. I currently set aside £140 every month into a seasonal reserve to ensure I can cover my £780 rent when the weather or the job cycle slows down.

The discipline of cash flow

I have made a hard rule: a client's deposit for materials is never to be touched for anything other than those specific materials. It sounds basic, but when you are self-employed, the temptation to dip into that money to bridge a gap elsewhere is always there. I refuse to use a client's money for unrelated jobs. It keeps my business finances clean, even if it makes my personal cash flow feel tighter in the short term.

Weathering the delays

Budgeting for rain-delayed work is just part of the job. Last autumn, three weeks of heavy rain stalled a project entirely. That taught me that my income projections must always be cautious. I never base my monthly spending on the maximum amount I could earn; I base it on a more conservative estimate that accounts for the days we physically cannot work.

I treat every job as if it could be the last one for a while, keeping the business cash away from the family savings.

Managing the unexpected tool costs

Last month, I had to replace a piece of equipment for £380. It was an inconvenience, not a disaster, because I had factored in that these things happen. People often assume that self-employed builders have a massive surplus, but most of what I earn is just turnover that needs to be reinvested into tools, materials, and insurance before I ever see a penny of personal income.

Separating family from business

I am very strict about keeping the business cash distinct from the family holiday pot. If I mix them, I lose sight of whether the business is actually viable or if I am just subsidising my lifestyle with the company's operating capital. It makes for a less exciting bank balance, but it gives me peace of mind when the work dries up in January.

Moving through the cycles

I am not expecting to strike it rich, I am just looking for consistency. The £140 monthly savings contribution feels like a small drop in the ocean, but it represents the difference between feeling panicked and feeling prepared when the rain starts to fall and the sites close down for the season.