5 Ways to Decrease Costs around your Household to support your Entrepreneurial work life

mumpreneur lifeIn all of my conversations with other Accountants, Brokers, and Financial Planners who work with Entrepreneurs is that they end up coaching their clients in their personal finances.

The attractiveness of having a balanced lifestyle with running your own business often offsets the financial lifestyle that you may have been used to. No longer are you bringing in a regular, consistent wage alongside (or not) your partner’s salary – so what used to be two wages, has now decreased significantly. But many people still live as though they’ve got access to their past disposable income.

It’s bloody hard work when you’re starting up a business. And then on top of that there’s your life which continues – be it that you’ve got your kids to look after, elderly parents to run errands for, or tied up at home because there’s a mountain of laundry to do. For myself, I have a flexible part-time freelance role alongside my business, which fortunately allows me to work from home. Being grounded in my own household budget, I know that a part-time wage will bring some consistency whilst I churn as much business and credibility to fill my pipeline.

I know of a lot of entrepreneurial type courses out there offer the blue sky of replicating your past working income in 6-12 months, but the reality is that it takes an average of 3-5 years to produce enough revenue to pay yourself a wage to even cover BASIC bills at home – or said a different way micro-businesses fail in the first 3-5 years, and people end up back in the workforce. There are these statistics out there because there’s enough examples to measure and be reported on across publications and white papers. I’m not saying that there are no exceptions, I’m saying let’s be real and stick to what’s historically been predictable.

Unless you saved like a mofo and have a year’s expenses saved up or you’ve got a partner whose take home income is sufficient to support the household and your business for the next few years, what can you do to trim the fat around the home to make sure that you can continue pursuing your business dream?

Here are some aspects of your household finances to start looking at with cutting costs, and you can apply the same sort of thinking across other areas which aren’t captured here:

1) Extra- curricular activities

I had a client who actually asked her primary school aged children which sports they’d like to keep. They both said that they didn’t like tennis but kept doing a different sport each. So they struck tennis out of their budget. Maybe include the children in discussing cost cutting activities? You might be surprised what ideas they may also have.

2) Cleaning / Gardener / Maintenance

When my husband left his corporate job two years ago, the first thing we dropped was the cleaner. For a friend of mine in the same position, she kept her cleaner but compromised in other areas of her life. It’s a personal choice, but work out the sums and see whether you can justify the expenditure (ie paying $90 every fortnight equals $2340 a year).

3) Sell off your things: Minimise to maximise

Find things that are worthy of selling second hand. Even $10-$20 amounts add up to a nice sum. Plus, it’ll assist in decluttering your space.

4) Stop buying things new

Toys, homely things from K-Mart / Target, clothes and furniture are a fraction of the price if purchased second hand. It takes great discipline to keep the purse strings tight. Plus you’re doing the environment a favour by recycling.

5) Decrease incidental spending that is not necessary

Need I say more! It was only a few days ago that I grappled with purchasing a two for $10 deal on Pukka Tea (they usually sell for $8 a pack where I shop!). But incidental spending is what blows budgets out of the water. When my clients track their spending, 100% of them (yes 100% of them) notice how much extra they spend on food / additional groceries / take away and just “stuff”.

The fastest way to have more money in your pocket right now is to spend less. Unless you win the lottery, have an expected inheritance, win a fabulous account or your partner’s wage suddenly increases, it’s best to preserve what you have and what’s coming in. So then you are free to manage your business whilst things at home, financially, are taken care of.

 

Decreasing Costs around your HouseholdHi! My Name is Fay from Budgeting123! I am a financial readiness coach, mum and an avid writer. I am very passionate about everyday, personal money matters. Whether you are trying to buy your first home, second home or needing to clear some debt before making an investment I am here to help. I also specialise in providing clear and easy to follow budgets for both families and singles.

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