When you have a business and a family, it can feel like you have two full-time jobs at the same time. Both need time, care, and resources, and it can be hard to keep track of the money side of both. Managing long-term savings, business investments, and living costs often needs a well-thought-out plan. When parents run their own businesses, they need to plan their finances carefully to keep their family and business stable. Here is a guide on how to handle your money well as a parent and a business owner.
- Make separate budgets for your home and your business
Separating your personal and business funds is the first thing you need to do to get a clear picture of your money. You can keep track of where your money is going and avoid mixing personal and business costs by making two separate budgets, one for your family and one for your business. When making your family budget, you should include things like your mortgage or rent, groceries, child care, savings, and so on. The operational costs of your business, such as rent, payroll, marketing, and tools, should be in your budget.
Why it’s important: Having separate budgets helps you keep better track of your cash flow, make smarter choices, and stay out of financial trouble. It also makes sure you follow the rules when it comes to taxes.
- Decide how to spend your money
You may have different cash goals as a parent and as a business owner. For both your family and your job, it’s important to set priorities. For instance, you might want to save money for your kids’ college but also put money back into your business. Short-term and long-term goals should be written down. For example, you could want to save for an emergency, grow your business, retire, or take a family trip.
Sort these tasks by how important and how quickly they need to be done. Then, when making a budget, give them money in the order of how important they are.
Setting clear goals helps you avoid spending too much and makes sure that the financial needs of both your family and your business are met.
- Save money for emergencies for both of you.
Being a mom and running a business can be hard at times. A medical bill or quick drop in sales can be scary, but an emergency fund can help you get through it. Try to set up different emergency funds for your business and your family. Aim for three to six months of living costs for your family. For your business, set aside enough money to cover the costs of running it for at least three months in case things go wrong or problems arise out of the blue. If building an emergency fund is challenging, you might consider options like a loan at Lamina to help manage cash flow during tough times.
Why it’s important: Having emergency funds ready lowers the chance of being stressed about money during hard times. This gives you peace of mind and the freedom to deal with unplanned events.
- Make a tax plan
You have to pay more taxes as a business owner than just your own. These include corporate taxes, salary taxes, and VAT (if applicable). Set aside some of your business’s cash each month to pay your taxes. This will help you stay organized. When you do your own taxes, you might also want to look into tax breaks and credits that have to do with your family, like child tax credits or school savings accounts.
Tip: If you live in a place like Malta, find out if you can get a tax refund or work with a local tax expert who specializes in VAT services in Malta to get the most out of your taxes.
Why it’s important: Planning for taxes all year long keeps you from being surprised at the last minute and keeps your cash flow smooth during tax season.
- Give yourself a salary
When your business is first starting out, it may be tempting to put all of your income back into it. But as a parent, it’s important to give yourself a regular salary. Settling on a set salary helps you pay your bills and gives your family financial security. Be honest with yourself about how much your company can give you without hurting its growth.
Why it’s important: Giving yourself a pay makes sure that you are rewarded for your hard work and that your family has a steady source of income.
- Set up automatic ways to save and invest
It’s easy to forget about long-term savings when you’re busy running a business and taking care of your family. You can make sure you’re always working toward your financial goals by setting up automatic payments to savings accounts, retirement plans, and college funds. Whether it’s a personal savings account for a family trip or a business fund for future growth, setting up automatic transfers can help you stay on track without having to keep an eye on it all the time.
Tip: For both your family and your business, you might want to look into different types of savings plans, like retirement accounts, 529 plans for college, or business growth funds.
Why it’s important: By setting up automatic saves, you can easily stick to your financial goals and build a safe future for your family and business.
- Look over and change your insurance
If you own a business and have kids, you need insurance to protect both your family and your business. First, make sure that your life insurance covers enough to take care of your family if something happens to you. Check your home, health, and unemployment insurance as well to make sure your family is fully covered. To protect your business, you might want to look into business liability insurance, property insurance, and professional liability insurance.
When you have enough insurance, you protect your family and your business from losing money in ways you didn’t expect.
- Give financial duties to other people when needed
If you’re a mom and a business owner, it can be too much to handle. Sometimes you should get help from a professional. You might want to hire an accountant or financial planner, such as a business accountant in Ottawa, to help you with your taxes, bookkeeping, and long-term financial planning. Giving these jobs to other people can free up your time and help you make better choices.
Tip: To make sure your specific financial needs are met, work with a financial manager who helps parents or people who own small businesses.
Why it’s important: Getting help from a professional can help you avoid mistakes that cost a lot of money, save time, and make a better financial plan.
- Use tools for money management to stay organized
Track your personal and business money with tools or apps for financial management. There are many tools, like QuickBooks for businesses and Mint for personal finances, that can help you keep track of your spending, expenses, and cash flow. With these tools, it’s easier to keep track of your money goals and make sure nothing gets missed.
It’s important to stay prepared because it helps you avoid late payments, keep track of your savings, and make smarter choices about your money.
- Get your family involved in planning your finances
Finally, get your family involved in the process of planning your finances. Teach your kids how to save, make a budget, and handle money if they are old enough. Talk to your family about your financial goals, like saving for college, holidays, or other big costs. This not only teaches people about money, but it also makes them more responsible and encourages them to work together.
Why it’s important: Including your family in money choices makes things clear and makes sure that everyone is working toward the same goals.
Managing your money as a mom and a business owner can be hard, but if you know what to do, you can keep your finances stable in both areas. It is possible to mix business growth with family well-being if you make separate budgets, save for emergencies, set up automatic savings, and pay yourself a salary. Plan your taxes ahead of time, get help from a professional when you need it, and use financial tools to stay prepared. You can make sure that both your family and your business have a safe financial future if you plan ahead and take action.