Today’s Biz Ladies post comes to us from previous contributor and CEO of Smart Cookies, Sandra Grahame. Sandra has shared her financial strategies on The Oprah Winfrey Show, The Today Show, CNN, FOX, and in The New York Times and she is also the author of The Lift – An Uplifting Money Guide For New and Expecting Parents. Today she offers us some helpful and detailed insight into how she went about saving money for the upcoming birth of her second child. Thanks, Sandra, for giving up a insider’s look into your personal financial strategies! —Stephanie
Read the full post after the jump…
I haven’t shared this with a lot of people, but before my first son Jack was born, I had no idea how much having a baby would actually cost. An especially frightening confession, considering I own and run a business called Smart Cookies that is dedicated to helping women make smart financial choices and have even been invited on Oprah’s stage to share my money saving strategies. But the truth is, when I was pregnant with Jack, the idea of creating a new financial plan with a baby on the way was completely terrifying and overwhelming to me. There was so much information and I had no idea where to start, not to mention I had other important things to do, like taking naps and planning my nursery on Pinterest.
So by the time Jack arrived in Dec 2011, I was not financially prepared. People warn you that the days go by quickly with a newborn, but it wasn’t just time that was disappearing, it was my money too. As an entrepreneur, “predictable income” is something I strive for, but it’s never a given and I worried constantly about what would happen if I could no longer count on income from my own business. Then, almost as if my own anxiety had willed it, something unplanned did happen. The structure of the business that I owned and ran with four other partners changed drastically, and for me, it meant that I would have no salary when I planned to go back to work. Suddenly, I was faced with no income, a two month old baby, and no plan. It was one of the most stressful times of my life. With no plan and no real savings, my worry and anxiety about money grew even worse; I was an anxiety-ridden mess. Having a new baby is a crazy and stressful time for any parent, but its also beautiful and full of once-in-a-life-time moments that go way too fast. With Jack, my money fears and anxiety robbed me of fully enjoying so many of those moments. I don’t have many regrets in life, but that is a big one.
So a year ago when my husband and I decided to start trying to have another baby, I was determined to do things differently; and set out to create a financial plan for our family and my business, and to do whatever was necessary to have enough money in savings, so that we could enjoy our new family free from money worry. After crunching the numbers, we set a goal to have $17,000 in savings by the time our new baby arrived which would help cover our costs even if there was no income coming in from my business while I took time off to be with the baby. Over the course of a year here’s how we did it:
- Adjusted our cable and Smart Phone plans: $100/mo
- Canceled credit card travel insurance that we had added for a trip but forgot to cancel: $10/mo
- Became strategic with grocery shopping and started making a real effort to use ingredients we already had at home: $150/mo
- Bought all of Jack’s clothes and toys and gear on consignment instead of buying new: $1200
- Drastically cut back our own clothes shopping: $1300
- I saved every penny I took as salary from my business: $7000
- My husband took on a part-time hockey coaching job: $5000
- Became an Impulse Saver ( I’ll explain this more below!): $3016
I am so proud that we saved, but truthfully even prouder that the savings just didn’t disappear.
In the past, I had a habit of cutting costs in one area only to end up spending the money on a dinner out here, or a trip there, or treating myself to a trip to the mall. But for the past year, any unexpected money like our monthly savings and contract work was automatically transferred into an online savings account so that it would be hard for us to touch.
I also found it helpful to treat saving money almost like a game. I realized I had become a really good impulse spender, so I challenged myself to become an impluse saver. Meaning, every time I resisted a coffee for $3.50 or dug up a coupon for $2.50, or parked in the spot further away to save $5.50, or negotiated a discount at the doggie wash for $10, I would make a note in my iphone with how much I saved. At the end of each week, I would look at how much I saved which on average was $58.00, and I would transfer that cash from our checking to our savings account. Over 12 months, that added up to over $3000!
Our baby girl is due this April and I’m so proud to say that I’m no longer teetering on the verge of a full blown financial panic attack. As a business owner, I know there are going to be unexpected expenses and things I can’t control, but I’ll be ready. The weight has been lifted and I can’t tell you how excited I am to soak up all of the crazy, exhausting, beautiful moments I have to look forward to in a matter of weeks without the weight of money worries on my shoulders.