They’re two of the hardest jobs in the world: being a parent and running your own business. But with a few simple strategies, you can win at both, and teach your kids some valuable lessons along the way.
For the pre-school set, childcare is key
When your kids are too young for school, reliable childcare makes all the difference. If you’re thinking you can do both – run your biz (even from home) while caring for young children – think again. It’s nearly impossible to do both well.
Sure, having your own business can offer flexibility that you probably won’t have with a regular job, and you may be able to combine business responsibilities and childcare occasionally (like on sick days). But planning to do both full-time will derail your business success and make everybody miserable.
If you’re having trouble finding reliable childcare, give these at try:
Childcare (unfortunately) is not a deductible business expense – but the increased time and focus you’ll have to run your business will help boost your profits in no time.
Get your school-age kids involved
As soon as they’re old enough to start learning about responsibility and money – around age 8 – hire your kids. Not only will you gain some valuable tax savings, your kids will learn important life and finance lessons. And when they’re invested in your success, they’ll be more supportive of your crunch times.
The most important thing here is to make sure your kids have age-appropriate jobs. These jobs must be related to your business (they have to be real jobs), and not just regular household chores, in order to reap the full tax benefits. And the pay has to be legit – the same rate you would have paid a regular employee to do the job.
In addition to saving on childcare costs, you’ll earn some sweet tax benefits by shifting income from yourself to your kids. Plus, once your children have earned income, they can start socking cash away in Roth IRAs (learn more about that here). And because of the way these IRAs work, that money can be used to help pay for college, helping them avoid the massive burden of student loan debt.
Some things to keep in mind:
So what counts as a real job your child can do?
Younger children can do things like
Tweens and teens can do even more, such as
Make sure to keep a log of your child’s duties and work hours, either with timesheets or timecards, in case the IRS questions that employee relationship. The more documentation you have, the better off you’ll be.