What is a common challenge for self-employed individuals?

Self-employed individuals often experience irregular income, which can fluctuate based on the nature of their work, client availability, and market demand. Unlike traditional employment, where individuals receive consistent paychecks and have automated deductions for taxes and benefits, self-employed persons must manage their finances actively. They face the added responsibility of estimating their taxes, paying quarterly self-employment tax, and setting aside funds for retirement and health insurance. This can create challenges in budgeting and financial planning, making it essential for self-employed individuals to develop strong financial management skills to navigate these variables effectively. Thus, the aspect of managing taxes independently further emphasizes the unique challenges encountered in self-employment.