Are you treating yourself to a financial rut?

By Melanie K

Financial resilience has been a recurring theme here lately, as well as really focusing on saving money and reducing debt. It's easy to talk about the technical stuff that helps you to do better financial management (putting together a budget, setting up an automatic savings plan, paying down debt every month). But, I think it's important to get into the details of what this means in your day-to-day life.

I'm big on visioning. You know, like athletes do when they are preparing for a competition. I think the same process works with financial goals. Think about what you're trying to achieve, and try it on in your mind.

Now, visualize this personal finance observation in your own life: What has become normal daily spending in many of our lives, should really be treats (I'll treat myself to lunch out, I'll treat my friend to a coffee). These spending habits have become so engrained that we don't recognize them as such. Treats happen occasionally (once a week or every two weeks); habits happen almost daily.

Women in Business: Have treats become a habit for you? How would your daily spending change if you changed those habits?

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Six tips for making a part-time consulting business work for you

by Melanie K

A lot of advice that you will hear about transitioning into full-time self employment includes running your small business part-time for a while. This is particularly easy to do if you are providing a service (research, writing, consulting) that you can run out of your home on evenings and weekends. There are pros and cons to doing this, and after running part-time for two years now, I thought that I would share some strategies to help other women in business achieve success and maintain some sanity!


1) Look for sub-contracts. Project management is time consuming and very it's difficult to do a good job when are committed the rest of the time with a regular job or family responsibilities. A sub-contract leaves the heavy lifting to some one else while you work on a smaller piece of the project.

2) Look for short contracts. You could be working any where from 10 to 20 hours a week on top of your regular work week. Doing this from months on end will cause you to burnout and become ineffective in both your day job and your small business. Avoid contracts that are more than a couple of months in duration and give yourself a few weeks between contracts to recuperate. It's better to be upfront at the outset to that their expectations will be adjusted accordingly.

3) Be transparent with clients. When I discuss taking on a project with a client, I make sure they understand that I'm a part-time business. They must know that you are doing the majority of the work and email correspondence on evenings and weekends and that in- person meetings and phone calls need to be scheduled ahead of time so that you can fit them into your work schedule.

4) Negotiate flexible work arrangements with your employer. It helps a lot if you have an employer who is flexible about your work schedule. In a salaried position, you can try to negotiate a self-funded leave with your employer. This is where you give up 5 - 10% of your salary for additional time off work every year that can be used for your business. In times of economic slow down, this might be easier to do, since your employer can still keep you and save some money. Before you do this, though, see what impacts it may have on your pension and extended health benefits.

5) Remember, you are working to live. Taking time each week to socialize, exercise, and relax is very important to avoid burnout. Schedule time once a week to meet a friend for lunch or coffee, and reserve at least one week night when you don't work at all. Limit your total hours on the weekend and holidays. At the end of each contract use some of your extra earnings to spoil yourself and your loved ones with a holiday because you all deserve it!

6) Keep improving the business. Even if you don't have a contract going, do other things to bring your business along. Take business courses, network, manage your finances, work on marketing projects, read books. All these things will contribute to your success when you finally launch into full-time self-employment.

Follow any or all these strategies and you will be more successful at running your part-time business! After a couple of contracts you will feel great about the future and about planning your transition to self-employment!

Women in business:What strategies have you used to manage your part-time pursuits?

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Women Preparing for Entrepreneurship [3]: Four things you can do to actually make it happen

by Melanie K

Deciding to launch your small enterprise full-time can be daunting. So much so, that for some women it just never happens! In her book Making a Living Without a Job, Barbara J. Winter recommends setting up a transition plan to help you stay on track. Here are four things to help you work towards becoming your own boss:

1. Prepare mentally. This is one of the most fundamental things you can do. If you already have a job, start to think of your boss as a client, rather than your employer. Look at your regular job as your ticket to self-employment.
2. Do something everyday that will help you prepare your business. This might include registering your business name, setting up a home office, opening a bank account, finding mentors, setting up a marketing plan, research, reading, networking, and so on.
3. Stay focused on the big picture. Use your time wisely. It's good to do a lot of research but also make sure you put what you've learned into action.
4. Set a launch deadline. A deadline can be a date, but it doesn't have to be. It can also be a target monthly revenue from running your business part-time; or a personal financial goal such as paying off debts, or achieving a savings goal.

Women in Business:
What accomplishment made you REALLY feel like your small business was on its' way?

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The immigrant's guide to personal finance : Four long-term strategies to improve your financial resilience

by Melanie K

In light of the current downturn of the economy and looking at the security of my own financial future, I can't help but reflect on the money management philosophies of my own parents, grandparents, and in-laws, most of them immigrants, and survivors of wars, the Great Depression and the Cold War. These experiences shaped the way they managed money, and while many of them have had over-the-top, frugal-to-the-extreme habits, even after achieving financial success, there are a lot of good, conservative, money management philosophies that the current middle class have simply abandoned in the relatively prosperous decades, and overly accessible credit, that we have enjoyed.

What lessons can be learned from these people who have seen some of the worst economic and political uncertainties within the past 100 years? I'm incorporating these four into my own long-term financial management plan:

1) Save first, then buy. Avoid credit, period. Knowing how to manage credit is key. When they came out with 0% interest in the 90s, my retired parents actually bought a new minivan on a monthly payment plan for the first time in their lives. My parents did this for all of two months - and then paid it off because they had the cash. They just were not comfortable 'owing' anybody. You might think it's nuts to turn down free credit like this, but my parents took debt very seriously, and our generation could also take it a lot more seriously then we do.

2) Have a backup career. One of my small business mentors is from an Italian family and her parents always told her to have a second skill set that she could earn a living from, 'just in case'. Passive income from renting a suite in your home, for example, can serve this purpose too.

3) Maintain an accessible cash reserve. Although she has always been an avid investor, my aunt made a point of keeping a portion of their family contingency fund in a local savings account so that they had cash that was available at the drop of a hat for emergency expenses. These days, having all of your savings in something like high interest online accounts means that it can take several days to access your funds.

4) Buy a home you can afford and pay down the mortgage. This follows the 'save first, then buy' philosophy. Put more than the minimum down on your house, and buy what you know you can afford (not what the banks are willing to loan you). Start with a small home rather than a dream home. My aunt actually never left her starter home. My parents raised three teenagers in a small three bedroom house, and made sure they owned it outright, before they built their dream house. When you invest in real estate, stick with it, make due, and pay the mortgage off as quickly as you can.

While it may be difficult for many of us to see beyond this economic turmoil, I think it will teach us some hard lessons and change the way we view quality of life and financial security. When it comes to managing money, some of the 'old ways' may become new again.

Women in Business: How will these economic times change the way you manage your long-term finances?

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