WAHM Financial Considerations.

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How does a mom on a budget save or invest for the future?

She can!

"A work at home mom who earns $12,000 a year LESS than an office mom but who has no commute, takes care of the housekeeping and does not hire childcare, has a lot more actual disposable income than the office mom... up to $633/month more!"

By Mary Ayala, Ph.D., a Mom and Professional Economist

The hardest task in the world that I can think of for a young, struggling work-at-home mom to think about is her family’s financial future. Financial freedom often lies so far beyond her daily concerns and responsibilities that it becomes a ’panic’ issue topic for a young work-at home mom to consider because she believes that it is beyond her immediate ability to change her situation. Having been in this situation a long time ago, I can attest to the fact that this is a mindset that has to be reversed before she can move forward with confidence to achieve her financial goals.

Suzie Orman, the former stock broker with a 6 figure income is great; but she just does not really tap into the issues confronting a work-at-home mom, not to mention, how removed her advice is for a young, work-at-home mom who earns perhaps no more than $15,000-$20,000 annually; and is the sole supporting member of her family.

Therefore, hopefully this and other articles or support groups will help work-at-home moms realize that they are or can be a formidable group of women who can attain financial freedom now, not in 20 years. The path to financial freedom for work-at-home moms begins with the realization that they have power both personally and financially to accomplish their goals. It begins by making personal choices about compatible career and family goals that are achievable from one week to the next. Setting and achieving realistic short-term goals is infectious and powerful because it illustrates to both a work-at-home mom and her children that they have the power to achieve just about anything they want to accomplish. This practice becomes habit forming; and it is a very powerful personal attribute that others will immediately recognize and respect. But then, how does this power, this self-confidence and empowerment create a viable path to financial freedom? It comes with the realization that every Dollar saved without giving up anything is a Dollar that produces Financial Freedom. It is an actual fact that more women and men have become millionaires in their lifetimes by regularly saving some portion of their disposable incomes and by eliminating debt, than by any other means such as joining the corporate scene with the intention of becoming a 6 figure, income-earning corporate CEO (see Women on the Road to Financial Freedom at www.mary4money.com).

How does one do it?

For a successful single, work-at-home mom who earns perhaps $20,000 annually in gross income, the road to financial freedom begins with budgeting and setting a realistic expectation that there will be little savings, unless she can learn the art of substitution. Personally, I hate cutting coupons; but I am great at looking for certain over-priced items that are available at bargain-prices. Assuming that the major recurring costs of housing and utilities for a single mom and her child can be budgeted regularly for about $700-800 per month, the family’s remaining expenses have to be limited to $600-$700 per month. The idea is to save initially $5 per week …and eventually as a work-at home mom improves in the art of substitution, she will save more. For me, listing the items that can be substituted for other items at lower prices often leads to elimination of certain purchases that were completely unnecessary.

For the work-at-home mom who is not a single parent and sole supporting member of her family, the art of substitution is a good thing to implement; but also consider giving yourself a ‘raise’ in pay periodically.

And work at home moms may be in a better position to save money than her office-based counterpart. According to the U.S. Census Bureau , the median income for a female who was employed away from her home in 2005 was $32,000. But after taxes and work-related expenses such as day care costs, housekeeping and gas to get to work, her actual disposable income is actually $8400-$14,000. A work at home mom who earns a lot less, let’s say $20,000 a year, but who has no commute, takes care of the housekeeping and does not hire childcare, has a lot more actual disposable income than the office mom.

In fact, the work at home mom’s actual disposable income is $16,000 per year -- up to $633 per month more than the office mom -- after paying the same percentage of taxes as the office mom.

Women who become self-confident and learn to exercise the power that they really have, will also learn to exercise the right to save some portion of the money that they have earned. And, they will be on route to financial freedom!

The hand that rocks the cradle can also hold a lot of cash. Be sure to save for the financial well-being of your family’s future.

Mary Ayala, Ph.D., is an Economist. Professionally, she is an economic and financial analyst for a Legislative entity and also manages a real estate investment trust and invests in stocks. Mary is a Specialist in international trade and macroeconomics. Mary has also been a very happy, but certainly not affluent, single mother who raised two wonderful boys. Today they are two extraordinary adults. You can visit Mary’s site at www.mary4money.com.

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