As we close out a year that has been a financial struggle for many family child care providers, let’s pause to count our blessings with family and friends. Let’s also hope that the next year will be better for us all.
It’s not too early to think about setting financial goals for the year.
Sometimes the hardest thing to do is to take that first step and set goals for yourself and your family. If the task seems too overwhelming try to set goals that are more manageable. Here are some suggestions. Your financial goals may be different.
1) Capture the employer match for retirement contributions
If possible, try to contribute enough to your spouse’s 401(k) plan in 2011 so you can receive the maximum employer matching contribution. This is free money and should be high on your list of priorities for the year.
2) Gain more control of your expenses
Seek to reduce or eliminate your credit card debt. If you can’t pay off your credit card in full at the end of each month, this is a sign of over-spending. If you have an unpaid balance, start by paying off any new spending each month.
3) Establish a three-month emergency fund
Life is full of unknowns, so set up an emergency fund to cover the unexpected (house repair, medical bill, loss of clients, etc.). Start by setting a smaller goal of a one-month emergency fund for 2011.
4) Set up a car replacement fund
Borrowing money to buy a car means you are paying interest for something that is decreasing in value over time. Ideally, you should pay cash for your next car. If this won’t be possible, start saving in 2011 for your next car so you can increase your down payment substantially.
5) Purchase insurance
Protect yourself against the major risks in your business by purchasing business liability insurance. Many homeowner’s and car insurance policies do not cover family child care providers. Contact your insurance agent for an annual insurance checkup to make sure you are adequately covered. See this online insurance directory.
It may not be possible to reach all your goals by the end of 2011. Don’t be discouraged. Try to set reasonable goals and measure your progress each year. Taking small steps now will make a difference in the long run.
What financial goals will you set for the year?
Tom Copeland – www.tomcopelandblog.com
Image credit: budgetfab.com
For more information on retirement planning, see my book Family Child Care Money Management and Retirement Guide.