Women's empowerment and the rising cost of living have motivated moms across the world to become mompreneurs. While these moms are starting their own businesses and living out their dreams, they're also achieving financial independence.
By emphasizing financial independence, mompreneurs can learn how to spend, save, and invest wisely, ensuring they and their families have bright futures ahead.
What is financial independence?
The first step to achieving financial independence is to define what it entails. There are different definitions of financial independence, but it basically means being able to pay your expenses, not having debt, and saving up for things like retirement and your children's college tuition. In this scenario, you would not be dependent upon a partner or anybody else to pay your expenses.
When looking at financial independence, you'll need to assess your income (including your take-home pay, investments, and government benefits), how much debt you have, and how much you have saved for retirement and an emergency savings fund. You should also look at how much it costs to comfortably live now and in the future when you stop working.
Everybody's definition of financial independence is different depending on what matters to them in life. Some people want to take vacations, while others want to save up for their children's college tuition, weddings, or homes. Figuring out what is important to you is critical.
Now that you know what financial independence is, here are some steps you can take when trying to gain financial independence.
Look at how much you're making and spending
According to mompreneur Gwen Montoya, CMO at The MOB Nation, a national alliance of mom business owners, you need to take a close look at your monthly income and expenses. "Mompreneurs also need to have a clear understanding of their income and all of their business-related expenses," she says. "If you don't know how much money is coming in and going out, you can't plan or grow your business."
Monitor your financial situation
Mompreneurs' businesses can ebb and flow. One month you may have tons of customers and the next, things may dry up completely. That's why you need to be on top of your money situation when achieving financial independence, according to MODEFYwear founder and mompreneur Melissa Scott.
She recommends that all mompreneurs get an assistant so they can focus on making sales and taking care of their children, as well as give themselves a salary. "Even if you are working on a side hustle trying to make it a full-time gig, make sure you get into the habit of paying yourself every week, biweekly or monthly," she says. "Make it a set amount and don't deviate from it. This encourages you to push a little harder when you think you won't make the numbers (you'll be surprised how creative you get when it comes to making sales) and it also forces you to think of your entrepreneurship as a business."
Create a budget and resist temptation
Though you deserve self-care—after all, you're a busy mom and business owner—you need to resist the urge to spend on unnecessary services like luxury spa treatments when solid alternatives of equal quality are available, says Chayim Kessler, CPA at MiamiBeachCPA LLC.
He also says that to achieve financial independence, you should come up with a budget for all monthly expenses and create a shopping budget with your children, so they know their limitations.
Start investing now
Investing only pays off if you hold your investments for long enough, so you need to start ASAP, according to Jen Smith, a full-time freelance writer, and mompreneur who runs Modern Frugality.
She suggests that you don't wait until you have more time to invest; instead, start now, build it up slowly, and thank yourself later. "Don't be discouraged that your progress isn't as fast as other entrepreneurs who are full-time or don't have kids.
As moms, we have so many responsibilities that take priority over our businesses, and we have to be OK, taking a little more time to reach financial independence."
Learning how to gain financial independence is the easy part. Putting what you learned into effect can be tough. But by starting small and taking baby steps, you can ensure that you'll be well on the way to financial independence in no time.