Financial Fitness: How to survive on maternity pay and make the most of your money
Financial Fitness is like physical fitness. Why? Because physical health and financial health are important factors affecting your wellbeing and your security. While physical fitness involves building muscle and becoming more aerobically efficient, Financial Fitness involves building financial reserves and making your money work more efficiently especially during a period when it is needed the most.
I think that we (parents) are among those most financially challenged. First you have the challenges of either living on maternity pay, and seeing your household income shrink. Then you have the dilemmas around if and when you return to work, or how to split the childcare.
In my case I always felt that for me it was very important to remain as the main carer for my child. This is quite a challenge, and involves the inevitable balancing act. However, the three simple principles really helped me during the challenging time. It served as an inner compass to my own financial fitness and eventually to financial freedom.
Step #1 – Monitor and Control your costs
Let’s do a small check first: Can you right this moment say how much you spent yesterday to the nearest pound? What about last week? Last month? It is a bit tricky, isn’t it? We forget things that may seem less important. But to be financially in control means that you need to know what really consumes your money. Where is it going to and in what proportion to your income? You will be surprised how much of your costs is absorbed by things that when looked at retrospect seem unnecessary. Truth is that only real numbers inspire real motivation. So first step is to make a simple financial diary. Keep noting down every time you have to take your card out (and how much you spent). After a month of detailing every entry have a look at it, analyse your numbers and items. Let your diary tell you the whole story about you, about what you do and when you do it and why. How much are you actually spending and where is the potential to retain some of your money for future.
The simple financial diary you can find here… Start using it now! It is simple and requires maybe less than 5 mins a day!
Step #2 – Know your Income
The second step is the obvious: control your income. How much is it? In what proportion to your costs does it come? There is an ancient rule saying: cover all your costs with your income and leave 10% aside. Make this your motto adding: Make those 10% you save to earn even more money for you in the form of interest. Regularly create saving goals to bridge financially challenging periods, such as Christmas, and use NISA and other saving tools to generate tax free interest for you. Saving goals are actually quite important generally as they help you to overcome financial roller coasters during a year. Have you ever considered putting 20, 30 or even 50gbp aside regularly every month just for sake of being able to budget when it comes to Christmas? If you manage to do this for the whole year, you can enjoy the feeling of having 600gbp to spend just on your gifts! (and don't mind me saying, this is what average person spends on gifts every year!)
Those on very low income, it is worth checking what entitlements they have (right after understanding your own spending behaviour of course).:. http://www.stepchange.entitledto.co.uk/
But despite that, don’t rely just on benefits, try to equally be in control and consider using your talents to earn extra money. Is there any passion you have that you could turn into a successful business? Could you spare an hour each day dedicating just to developing your ideas and turning it into a business?
I recall a situation where mothers helped brainstorming to a fellow mum how she could earn extra money with her little one around. The ideas were brilliant: From being a swim nanny, to a strolling coach, even to making soaps or running a coffee franchise! The options were and are endless; it is just up to you to be inventive and to weight in the time factor.
Simple steps how to start your own business are here and how to control your income are here.
(also check out our earning more money section for ideas how to create secondary income)
Step #3 – Time management
Don’t let anyone waste your time. You know what you need to do during a day, so don’t let anyone get in your way. Be disciplined, write a schedule if necessary and stick to it! When I was starting my own business while my little one was just couple of months old, I glued a sheet of plain paper on the door and wrote every week what needs to be done and by when. We followed it. It gave us some routine and made us complete tasks more quickly, because we could always see them in front of our eyes.
Remember your child is the priority, but your health and fitness are equally important. You need to be able to be happy and be a confident parent. But this happens only when you incorporate some routine and some “me-time” to your day. I bet you hear this all the time, but let me repeat: LEARN to say NO. You are the boss, and you don’t need anyone to tell you what to do, just listen and be firm when it is really needed. Not only people around you, but also your own child will in a long run appreciate, respect and learn this skill from you.
I help my clients to pursue their own goals. I assist them to overcome whatever challenge they face, if you have a question or would like to comment, please use the button below and I will try my best to answer quickly.