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Money Management For the Work At Home Mom - Auto
Recovery
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by:
Wendy Wood
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One of the most difficult aspects of working
at home may very well be the money management. Even if you’re
making great money, many people find it difficult to make ends meet
when there’s not a weekly paycheck. Consider some of the
problems that arise and why the work at home mom may feel that
she’s really not making any money at all.
When you’re working for an employer who hands you a paycheck
on a regular basis, you quickly learn to manage your money with that
payday in mind. You know when the money is going to arrive, how much
it’s going to be, and you probably already know where the
majority of it is going to be spent. If you have some bills coming due,
you know without a doubt that there’s gong to be a paycheck
on a specific date to pay them.
When there’s not a paycheck on a certain day, you may very
well be starting to wonder how you can pay those bills on time.
It’s human nature to worry about money and the work at home
mom is no exception. There are some common pitfalls that you can avoid
if in your quest for good money management.
One of the most tempting things to do is to spend money as it arrives.
Most work at home moms aren’t fortunate enough to have a
regular income arriving in the mailbox every week or two. Money comes
in sporadically, and when it does arrive it may not be large amounts at
a time. When those small payments do appear, avoid the temptation to
spend them immediately. If it’s not enough to pay bills that
are coming due, put it aside until you have additional checks to meet
those bills.
This is the same pitfall that waitresses face. Many people in the food
service industry depend on tips as a major part of their income. They
collect those tips every day and it’s tempting to treat it as
“extra” money. But when the paycheck arrives,
it’s seldom enough to pay bills and make ends meet until the
next paycheck. So the cycle repeats.
If possible, send your checks directly to the bank. If not, pace
yourself to save everything you make for at least a week (or two). Then
cash or deposit everything at one time and take stock of your income as
opposed to your bills and expenses.
Another tactic to use when it feels that you’re not making
any money is to keep a detailed list of what does come in. When you
look back over that list, you may be surprised at how well
you’re doing – and it may be time to take stock of
your money management practices.
There’s nothing like receiving tax statements at the end of
the year to make you realize how much (or how little) you made during
the previous year. Most work at home moms won’t get tax
statements, or at least won’t get a single tax statement, for
the previous year. Your records will be the true statement of how well
(or how badly) your business is doing.
Many people find that keeping the records is the most difficult part of
money management for the home based business. You’ll likely
be paying taxes on your income so don’t overlook the
potential for deductions. Make an appointment with a tax professional
early in the year to get a grip on what expenses will be deductible. If
you have an office in your home, or if you’re just using your
home as a base of operations, you’ll probably find that some
household expenses are deductible. If Internet access is necessary for
your business, you’ll be able to deduct a part or all of that
cost. In many cases, you’ll be able to deduct a set amount
for “renting” your office.
A good filing system is also an important part of good money
management. You don’t have to have a degree in bookkeeping to
understand the need for keeping receipts and records of transactions.
If your business warrants it, you may find that it’s in your
best interest to set up a business account for your banking
transactions. While it may seem an unnecessary step considering the
amount of money that will be going through the account, it will help
you keep more accurate records. Your bank statements can sometimes
serve as proof of income. If you decide to take out a business loan,
the fact that you’ve taken the initiative to set up a
business account will look good to potential lenders.
One of the most important things about good money management for the
work at home mom is simply to be proactive in the
“management.” If you’re passive about
keeping records, filing receipts and tracking your income and expenses,
you may never feel that you’re really making as much as you
thought you could.
Good money management takes practice, patience and diligence.
It’s easy to get on with the work and ignore the need to
track your income and expenses. But as the old saying goes,
“it ain’t over till the fat lady sings.”
With home based business, it’s not complete until the
paperwork and records are done.
About the author:
Wendy Wood owner of All WAHM, which is home to the FREE COUPON MAKER,
also provides marketing tips and resources for the work at home mom at
AllWAHM.com
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