When it comes to planning a parental leave as an entrepreneur, freelancer, independent contractor, or self-employed individual, one of the most important considerations is how you’re going to fund your leave. Not everyone has three or six months of living expenses tucked away in an emergency fund. And even if you do have those expenses set aside, you may not want to dip into those savings for your parental leave.
In order to create your Parental Leave Fund, you first need to figure out how much money you need to save. Head on over to our free resources section and download the Parental Leave Budget Worksheet. This worksheet guides you through the steps to get that big Parental Leave Fund number.
Once you have that goal number set, next you can create your savings strategy for reaching your goal. It’s going to be important to go through your income and expenses to see if you have money each month that automatically can be set aside to fund your leave. If you don’t have money left over every month, don’t worry, you have two options: 1) increase your revenue, or 2) decrease your expenses.
I know this can sound intimidating but hang in there with me. You’re a creative problem solver, you wouldn’t be self-employed if you weren’t! Let’s go through some options on how to achieve both increasing your revenue and decreasing your expenses.
- Evaluate your current offerings: Write out a list of all your current services or products you are marketing and selling to customers and clients. Total up the recent revenue for each service or products. Are there products or services that are really outperforming others? Consider spending more time marketing these products and services. Are there products and services that aren’t generating a lot of revenue or traction? If so, it’s probably time to retire them and redirect that energy into the higher performing items.
- Launching a New Offering: Do you have a product or service that you’re been working on to launch? Now could be a great time to introduce a new offering with your audience. For service based businesses perhaps consider offering a high-touch, higher priced service or experience to bring in some extra revenue prior to taking leave. For product based businesses perhaps there is a higher priced item you can offer for a limited amount or time.
- Starting a side-hustle: Okay, so this isn’t really a side hustle but I find it’s a good practice both financially and clutter wise. Start cleaning out your closets, drawers, basement, attic, garage. Basically anywhere you keep stuff. List things for sale you no longer use, but are still useful on Facebook Marketplace, Ebay, Craigslist, or any other type of classified site you might use. This can be a great way to save some extra money.
- Go Through Business and Personal Expenses: Grab a highlighter, print out your past 3-6 months of bank statements and credit card statements. Go through line by line and categorize your spending. Circle items you no longer need- like lingering subscriptions you no longer use!
- Create A Debt Payoff Plan: Depending on the amount of debt you have, this action will take a while but is so worthy to pursue. The sooner you pay off your debt, the less money you’ll be paying each month in interest. Which means, more money in your pocket.
- Work on Lowering Your Variable Expenses: You may have heard this before, but you’re not going to be able to reach your savings goal by ditching the daily coffee. We have to tackle bigger expenses than that to save aggressively for your Parental Leave Fund. When you go through your expenses, look at your variable expenses, meaning the expenses that change from month to month. This often includes groceries, clothing, travel, eating out, fun/entertainment, shopping, etc. Consider for a certain amount of time to focusing on lowering your grocery bill to save a few hundred a month, or perhaps stop eating out/ordering in or cutting the frequency down. Working with these big expenses is going to get you a lot farther than cutting smaller expenses.
I hope this list is a great starting point for you in considering some different ways to being funding your Parental Leave Fund. While this list isn’t exhaustive by any means, it’s a good place to start tackling your plan. I know saving for a leave is a huge undertaking. It takes a nice chunk of money to take 3 to 6 months away from work! But I know that with dedication, a smart plan, and time you can make your parental leave dreams a reality. It’s truly worth it, and I know you won’t regret putting in the time and effort.
Next Steps: Head over to our free resources section and download the Parental Leave Budget Worksheet. Tag us on IG @fullyfundedx40weeks to show us your work!