Children are expensive.
That’s pretty obvious!
The food and toys. All those gorgeous little outfits to buy. The new bedroom furniture, pram and carrier. Let alone all the extras, to keep baby calm, occupied and sleeping through the night.
But what about the hidden costs?
You’re going to need to take some time off. And let’s be honest – it’d be nice to actually spend some time with your little one (or you’d have got a cat instead).
There’s NO maternity leave for business owners.
So unlike your friends in the corporate world, no-one will pay you to stay at home with your baby. You’ll need to find your own way to pay your bills and make the check book balance (so to speak).
Yes, you can apply for a maternity grant – but at a maximum of £151.20 a week (some only get £27 a week) it’s not going to go far.
Which might mean you end up having to go back to work, before you really want to.
So here’s my #3 top tips – to make starting a family AND your business work financially!
1. Build your savings pot while you’re pregnant.
Ideally, starting before you even get pregnant – so that by the time baby comes along, you have a pot of money you can use to help ensure the bills are paid (and to top up your partner’s income, if that’s the case for you).
I did this when expecting my daughter. Although I was employed at the time, my husband earned about 1/3 what I did.
I took 6 months maternity leave and I LOVED it! But there’s no way I could have taken that time out, if I didn’t already have £5k saved up (and 52 packs of baby wipes stashed away in the bathroom).
2. Pension contributions
While you’re on a lower income, you might choose to stop or pause the contributions into your personal pension.
It can seem like a good idea at the time – a way to free up another £300-400 a month, to have more cash to spend now.
The problem is that it can be REALLY hard to restart them.
Not physically – the process is usually quite easy for you or your financial adviser to do.
But guess what happens?
Life!
Once your children come along, maybe you find your working hours and income change long-term. And there never seems to be a good time to restart.
“I’ll pay into my pension again once she starts nursery / goes to school” etc.
But then another baby comes along. You decide to move house; build an extension; replace your car; take another family holiday. And before you know it, the kids are heading off to secondary school.
12 years is a LONG time to not make any contributions into your pension pot.
As the Telegraph put it:
“…but they risk a ‘pregnancy penalty’ of almost 300% – losing out on as much as £247,000 at retirement, as family get put first”
Even if you just take 5 years out, this is from the Times:
“Millions of women who take a five-year career-break when having children will be £65,500 worse off in retirement, researchers say.”
So if at all possible, keep your pension contributions going.
If you’ve built up some savings within your business, you’ll have enough to still pay your salary AND your pension contributions for at least 3-6 months.
If not, then factor this in when figuring out how big your baby fund pot needs to be (here’s my last blog, for more on this!). HYPERLINK UNDERLINED TO BLOG #1 ABOVE
3. Childcare
Having both been through this myself and worked with so many women in business, over the last 12 years…
Please don’t kid yourself that you can work from home as normal, with a baby there too.
I know lots of women feel pressure from their families to NOT pay for childcare. You work from home – you can just work when baby’s asleep? Right?
Erm…no.
This comes from a misconception that working for yourself is easy. That having your own business is less demanding (mentally and time-wise) then working in a corporate career or leaving the house, to do a 9-5 job.
It’s a complete lie. You and I both know it (even if your mother doesn’t ‘get’ it).
Most business owners put in just as many hours as their salaried counterparts. If not more, especially in the early years or if you’ve got big plans for your business.
You simply CANNOT work with any sense of stability or focus, if you’re trying to snatch hours at your desk as and when baby sleeps.
That’s assuming you’re not desperate for a nap too – babies are exhausting in the early months (let alone getting a moment’s peace once they’re toddlers!).
You may be lucky and have a partner who can take on some of the childcare. But that doesn’t necessarily solve the problem either.
You and I both know that to do your work and make money, you need to be able to focus. It’s hard not to go in and see what they’re up to – especially if you can hear your baby crying, which they all do – no matter how good the other parent is. It can all cause issues and tears when you need to go ‘back to work’.
A better solution may be a grandparent, if they live near enough to have your little one at their house.
But you NEED to have proper, distraction-free workspace (and head space) for at least a few hours a week.
So build some nursery or childminder costs into your budget.
Even 4-6 hours a week can make a massive difference to your productivity and allow you to be YOU (and not mummy) for just a few hours a week.
Like most things in your business, having a plan and knowing the purpose of each pound you make and spend is the key.
So if you’d like some help with creating a plan, so you can pause to have a baby – here’s where you can reach me and find out more about working together.
Do get in touch, I’ve been there personally and helped so many women make starting a family AND running their business work.
Would love to help!
Claire