Just remember that being self_employed means that you must also pay the self_employment tax, so include this in your calculations. The self_employment tax is double what you would pay in Medicare and Social Security taxes if you were employed.
Step Two: Limit Your Needs to 50 Percent of Your After_Tax Income. Now go back to your budget. How much do you spend on "needs" each month, things like groceries, housing, utilities, health insurance, car payment, and car insurance? According to Warren and Tyagi and their 50ቺተ rule, the amount that you spend on these things should total no more than 50 percent of your after_tax pay.