Budgeting When You're Self-Employed
We own our own business and things had been going great until this year started. We just had a baby boy last August and I quit my job of five years to be a stay-at-home mom. My husband was bringing in over $8,000, but now it's more like $5,000. We're cutting back now and buying only what we need. We want to move up in this world and have a growing business and some day own our own home—can you give me any advice so we can start managing our money better?
Being a small-business owner can be one of the most rewarding things to do in life, but it can also be the most stressful when it comes to money. One month you can be doing fine, the next, you're straining. That's why it's so important to make sure you have a big stash of cash to get you by when times are tight, and if you don't have it now, find a way to build it. It's not easy to do all this with a baby as well (my husband and I also had our own small business when our daughter was born and fell on hard times that thankfully turned around), but you need to assess your biggest expenses. Unlike some folks looking to cut spending, you guys need to go way beyond the latte's and look at your living expenses. How much are you spending on your housing? Is it more than 30 percent of that $5,000? What are your other big expenses? How much are you spending on transportation? I too want you guys to be able to move up and buy a home and to do that, you need to live as "small" as you can until the business stabilizes and/or grows. It can be a very big decision to move to a cheaper home, but assess where you're at, where you want to be and your worst-case scenario, and it may be the answer. Good luck and keep us posted!
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