Working Mom 3.0: Managing money woes

Though being a self-employed, work-at-home mom can be marked with uncertainty, there are steps you can take to make your financial life a little more predictable. In this issue of Working Mom 3.0, writer Stephanie Taylor Christensen explains how.

There are definite financial perks to being a work-at-home mom, not the least of which is avoiding the high cost of full-time child care, which actually exceeds the cost of annual in-state tuition and related fees at a four-year public college in many states, according to the report Parents and the High Cost of Child Care, based on data collected by the group ChildCare Aware of America [PDF]. But freedom over your career can come with a price, including clients who don’t pay, unpredictable demand, and the fact that you’re left to cover taxes, retirement savings, and health-care expenses. Here are simple ways to take some of the guesswork out of money management when you’re a work-at-home mom.

You’ll have months where the money feels like it’s rolling in, and others where you’re challenged to make ends meet when you’re a work-at-home mom, but the key to balancing such financial unpredictability is identifying one monetary goal to hit each month. Identify an amount that can cover whatever expenses you’ve earmarked your income for — whether it’s covering the monthly mortgage payment, or funding your family’s vacation and extracurricular activities — and make it realistic based on your history and your active clientele.

Continually track the progress you make towards your goal throughout the month, and use it as a gauge to balance and prioritize workload, particularly if you work with multiple clients who don’t share the same policies when it comes to when, or how much you’re paid. When you track and plan your month to an end target, you can spend your work time in a way that serves your financial needs, without running yourself ragged.

Approach your finances with the same eye that a financial professional would. Calculate your estimated taxes accurately, keeping in mind that they are due quarterly. Set aside the money needed to pay them as early in the year as you can, so you’re not at the mercy of clients who may not pay in a timely manner.

Second, put at least ten percent of your monthly earnings into an interest-bearing saving account until you have saved at least three to six months worth of your new income. Regardless of whether you have a SEP, SIMPLE IRA, or traditional retirement account, contribute to take advantage of tax benefits and long-term growth each year.

Work-at-home motherhood is always full of surprises — but your rates don’t have to be one of them. Set your rates based on experience and the market, but keep in mind that value and profitability are as much about dollars and cents as how well your career choices suit your needs now, and in the future when kids get older.

Intangible benefits, like clients who pay quickly and offer you exposure to new opportunities, are also important. In the end, your goal as a work-at-home mom is about striking a balance between working with clients who respect your talent (and can pay for it), and those who offer some benefit that contributes to your long-term goals, and allow for the flexibility you want in order to balance work and family life.

The modern woman is redefining what it means to have a successful career. Rather than feeling torn between climbing the corporate ladder and having a happy family life, many women are choosing to merge the two and transition their careers from a traditional role to a more flexible one. Working Mom 3.0 is reinventing the definition of “working mom,” as office hours are held at home and revolve around nap times.

This column begins by chronicling the experiences of Stephanie Taylor Christensen, a former marketing professional turned self-employed stay-at-home mom, writer and yoga instructor, as she strives to redefine “having it all” on her own time and terms.

More tips for working moms

Working Mom 3.0: Make your money work
Working Mom 3.0: Toot your horn
Working Mom 3.0: Lead by example