Instead, having left behind a very comfortable public sector job to run a small business, this means I’ve really had to get serious about money. Gone are the regular paychecks, the generous benefits, and the fully indexed pension. These days, I’m juggling the demands of pre-teen dental expenses, irregular cash flows, and the daunting task of creating my own secure retirement. Now, more than ever before, money really matters and there is nobody else but me to make sure it’s managed properly.
Before the business (B.B.) I earned a salary, spent more or less the same, and followed the conventional advice to save regularly for retirement. I did what I was supposed to do, and gave little thought to my financial situation, always assuming I’d be fine. Looking back, I was on autopilot. Then it all came to a screeching halt when I decided that my happiness was more valuable than the security that had me feeling trapped.
However, the shift from ’employer administered financial management’ to full personal accountability is massive, and has required a major change in mindset. More like slap upside the head, really! Being a woman of independent means is a whole lot of responsibility, let me tell you.
On the financial literacy file, I’ve definitely had some catching up to do.
I can say with some pride that I’ve come a long way since my less-than-savvy days, but I still have miles to go. Now that I’ve got a handle on the bigger picture, spending wisely seems so much easier. Somehow, I’m more resistant to impulse indulgences, and I’m happy making mortgage payments. Sheesh!
And, while I’m mostly self-directed, I often rely on pros. It’s important to me to know what’s being proposed, which is why I just keep on learning, even if I’m slow. So, here are the four areas I’m focusing on:
- Revenue + Expenses:
Regardless of it’s source, managing personal income and expenses is key to financial health. Spending less money than you make, and being very selective about debt, really is a simple concept. In practice though, we all know it can be a challenge. Now that I’m missing a regular paycheck, earning revenue, managing expenses, and investing carefully is even more critical. Bad debt is not my friend.
- Tax Planning:
Tax season is never fun, but I used to moan and groan just filling out the T1 . Nowadays, it’s way more complicated! Business and personal income, corporate taxes, and HST. Yikes! I’m keeping track (or not) of so much more, and believe me, this stuff is a core function.
- Savings + Investment:
Managing the ups and downs of a start up business can be tough enough, but I try hard to take the long view. My future is always looming. Soon, I’ll have to pay for my daughter’s school, not to mention support myself through life’s later seasons. So, I must actively attend to my RESP, RRSP, and retirement plans.
- Risk Management:
This last area can’t be overlooked considering my financial picture. Anticipating and planning for the ‘what if’s’ and ‘worst-case-scenarios’ is just as important as paying my taxes or saving for the future. Mitigating risk means spelling out a marriage/partnership contract, investigating the right kinds of insurance, and writing a will. All stuff I regularly review.
As woman, I’ve decided to make managing my own money a priority. I believe it’s essential to empowering myself, and I want speak about my finances from a position of authority. I also want to my daughter to grow up knowing the same.
I’m no expert, let me say again, and I do have to remind myself regularly it’s worth my time. Why? Because I really believe that ultimately, my finances are my responsibility!
Lastly, in the interest of full disclosure, I have a long list of to-do’s and my receipts are stuffed in a box meant for shoes. What about you? What do you do?