Shrewd money management, both in personal and business finances can lighten the load of a busy Momtrepreneur.
There’s a reason that Momtrepreneurs are such a rare and recent phenomenon. Well, actually there are numerous reasons, and they’re widespread and varies. There’s the stifling culture of gender inequality that has seen many a resourceful and intelligent woman fail to be taken seriously, resulting in a gender pay gap that experts predict could take centuries to close. There’s the biological instinct to spend as much time as possible with her children which has seen even the most ambitious career woman change trajectory. There’s also the fine line that needs to be walked between being a provider for your children in the monetary sense and being a provider in the emotional and corporeal sense. All working Moms know the gnawing sense of inadequacy that comes with never feeling like we’ve got the balance right… That we could be making more of our time and our money.
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Typically, however, making more of our money can also mean making more of our time. Shrewd money management, both in personal and business finances can lighten the load of a busy Momtrepreneur. Allowing her to invest in the equipment and personnel that will increase productivity without the need for her to invest quite so much of her time and effort into her business to watch her children grow. Watching your children and your business grow healthily and happily at the same time may sound too good to be true, but it can be done if you stick to these money managing principles…
Cut costs wherever you can
Many new Momtrepreneurs face the difficult balance between establishing the necessary infrastructure to run a successful business while still keeping overheads to a minimum. Finding this balance is not easy and even successful entrepreneurs still struggle with it. In doing this it’s important to make fiscal multipliers your friend. For each cost you should be able to calculate how much revenue it should be able to generate in its ability to contribute to profit or its ability to save money in the long term. If an overhead costs more than it’s worth it needs to be replaced with something cheaper.
Pay yourself what you’re worth
Many new Momtrepreneurs make the mistake of paying themselves too little in the hopes that it will help their business to grow. However, an entrepreneurs who is constantly worried about her own personal finances and her ability to provide for her children will rarely be at her most productive. Calculate what you need to pay your composite living costs, save for your retirement and set aside 10-20% for your future financial goals. Then factor that figure into your monthly business cash flow. So long as it doesn’t send the figures plummeting into the red, pay yourself that!
Save… but save smart
Speaking of savings, if you’re going to make your money work for you, it’s not enough to save, you have to save smart. Far too many people turn their backs on good money through loyalty to their banks or simply mismanaging their savings.
It’s vital that you take time to shop around for the best savings accounts. Most high street banks offer a fairly anaemic APY averaging out at a measly 0.06%. This is hardly likely to grow your savings in any meaningful way (unless you happen to already be a millionaire). Don’t forget that your savings account will be what keeps your head above water if your business hits a rough patch or circumstances keep you from your business. If you’re taken ill or need help with personal injury, your savings will be your lifeline. Thus, If you expect to make money from your money, online savings accounts will be the way to go. They tend to have a much better APY as they have fewer overheads and are able to pass that saving on to their customers. Here are some good ones…
- American Express High-Yield Savings Account- A familiar name with a good deal. This account has no monthly charges or minimum deposit but it does have an attractive 0.85% APY.
- Sallie Mae Money Market- No charges here either, and no minimum deposit. Just an APY of 0.9%.
- Palladian PrivateBank Online Savings- This has an APY of 1% with the caveat that i requires a minimum deposit of $10,000. You’ll still get that interest rate even if your balance dips below $10k though.
Manage your cash flow
Your cash flow will be what enables you to make capital investments for your business that will lead to long term growth and prosperity whether its a productivity boosting piece of equipment or a go-getting new employee. Maintaining a healthy cash flow, however, is rarely easy. You can help to manage this, however by towing the line with customers:
- Have a minimum order spend for credit accounts.
- Set an upper credit limit for each individual customer.
- Maintain clear communications at all times (not just when you’re chasing invoices).
When your personal and business finances are working well in tandem with one another, you’ll find yourself a much more relaxed and happy Momtrepreneur.