balance

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If all of this year’s financial news from the Fed, congress and White House
seems too big and uncontrollable for a lot of us, here’s something that hits a
little closer to home.  New financial regulations
of the CARD Act of 2009, Regulation Z, will go into place in October 2011, and
one of them prohibits financial institutions from giving credit cards to people
who do not have documented individual sources of income.  Although it
was originally proposed to ensure students weren’t saddled with consumer debt
through aggressive marketing, the wording was expanded to include any individual without documented
income.  Sounds like a good idea,
right?  Not so fast.  The fallout is that non-employed spouses will
no longer be able to use their household income to qualify for
credit.   

Who cares?  Stay-at-home moms and mister-moms
should.  The National
Retail Federation
said the rule “undermines more than a generation of
progress” since passage of the Equal Credit Opportunity Act. Because of
this rule alone, a woman should consider starting up her own business,
whether it is a primary or side pursuit.

 

There are many reasons to own a business in this country,
including tax advantages, continued professional development, schedule flexibility,
and income potential.  This new rule is one more reason for a mom to
have a business, even a teeny-tiny one, that documents profitable income. The
rule does not specify a minimum required income, but not having any documented
income is a show stopper when it comes to securing credit.  For all types of small businesses, including
home-party consultants, part-time blogger moms, retail store owners,
professional consultants, and more, a Schedule C or corporate tax return is the
documentation the credit issuers require.

 

“We’re not sure at all how this is going to work in
practice,” NRF Senior Vice President and General Counsel Mallory
Duncan
said. “Since most stay-at-home spouses are women, this could put
women back more than 20 years in terms of their access to credit.” 

 

I was married and divorced nearly twenty years ago, I went
through a rocky time personally that nearly ruined my credit. I believe
that this provision takes us back even further than twenty years.  We
forget that stay-at-home spouses have economic value in our society, even
though they don’t receive a paycheck.  A non-employed spouse should have
access to credit throughout their marriage so they don’t incur financial
hardship should death, illness, abuse or divorce markedly change their
status after years, sometimes decades, of partnership.  Family tragedies
are difficult enough without removing access to credit, an undeniable necessity
of modern life in America. 
Even those who live debt-free have a credit score.  Having a favorable credit history is as
important as having a job.  Credit doesn’t just mean credit cards, but is
required for basic social functions such as the ability to rent property, buy a
car, or establish phone service.  

 

Many women make major changes to their employment status
when they are pregnant or shortly after having a baby.  Many educated and
talented women step off a professional cliff when they start a family,
potentially creating unintended financial consequences for themselves and their
families.  But starting a family can also be a great time to start
something new professionally.  A business
that a mom runs during naptime or school hours can be rewarding and more economically
beneficial than just a positive profit and loss statement. A business also can
be a woman’s ticket to financial independence. 
With her own income, she no longer depends on her spouse to include her
on a credit account. 

 

Moms put others first in so many ways, but when staying
at home to raise children means you give up your own financial identity,
that’s just wrong.  

 

Since last March when this rule was finalized, there appears
to have been little progress on correcting this language to mitigate the impact
on families and women.  The best thing we
can do is be aware of our options, and owning a business is certainly one of
them. Add this new law to the list of reasons for a woman to have and maintain
a business before, during, and after baby. 

 

 

 

More sources:

http://www.federalreserve.gov/newsevents/press/bcreg/20110318b.htm    

http://www.creditcards.com/credit-card-news/stay-at-home-parent-credit-cards-household-income-1282.php

http://www.nrf.com/modules.php?name=Newsletter&op=viewlive&sp_id=324&id=51

 

Originally published in Kalamazoo Parent magazine, October 2011

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I got a call recently from a colleague with great news…she’s pregnant! But she’s also exhausted and worried about the business. She wanted to know how she’ll make it through without tanking the business she spent the last five years building. The good news is that the first trimester is often the hardest for many women. Oddly, the second trimester actually brings a surplus of energy for many. So taking care of yourself, napping when possible, and doing what you can to keep the business rolling, you’ll soldier on until you hit the second trimester, and then you can put some extra energy into planning the rest of your pregnancy and your first few months with your newborn. When I shared all of this with my friend, she was very relieved. She called me just a few weeks later letting me know that she was tackling new projects. You go, girl!

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Does your guy respect your business? Whether you started your business from nothing, came from corporate, or dropped all of your life’s resources into a new venture, your guy is one of the most critical members of your fan club, and every business needs a fan club that isn’t just virtual and online.

When I started my business (remember that I left a really respectable income behind), he took to talking about my “little business.”  It took a while of gentle and not so gentle reminders, but he caught on and started introducing me as a business owner.  When your guy describes your business in at least the same terms as you do, or perhaps even better, then you know he’s on board.

My business reached a milestone last year of 5 continuous years in business.  Hubby dear was paying more attention than I was, and noticed how I was gushing over the (then) recently released iPad.  He totally surprised me with my very own iPad to celebrate the business milestone.  If your hubby presents you with productivity tools, even if you aren’t sure they’ll work for you, take it as his vote of confidence in your business acumen.

He did it once again this year.  Just after the book was released, my husband presented me with a professionally shadowboxed version of the book.  Wow!  Not quite as expensive as the iPad, but still not cheap, and definitely something I never would have thought to get for myself.  Guys who get a sentimental gift that represents your success are priceless.

The saying used to be that behind every good man was a good woman.  But, hey, running a business, especially while you are pregnant, is a team sport.  There’s got to be a good guy behind you if you are going to stay healthy, happy and at least somewhat balanced.  Let’s celebrate those guys who help us forward.

Leave a comment here to crow about how your guy treated you and your business well.

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Every now and then you might read a story about the effects on children from moms moving from the home to the workforce.  Usually the news (or perception) is not positive.  However, I think that entrepreneurial moms have a different story to tell.
From an expert perspective, I strongly believe that being expert problem solvers (notice I didn’t say expert multi-taskers!) gets passed on to our kids.  This isn’t just hearsay, it appears to be neurological and something we can influence through upbringing.  I reference Richard Nisbett in his book, Intelligence and How to Get It, in this excerpt from my book, The Pregnant Entrepreneur:

“It turns out that being read to and exposure to books are socio-economic indicators that are found with higher-IQ children according to Nisbett.[i] Earlier and more consistent access to schools and learning programs are also highly correlated with higher intelligence.[ii] Being exposed to the problem solving, like that required to run a successful business, must qualify as educational, rich, and diverse experiences. Entrepreneurial mothers were not highlighted as a group in Intelligence and How to Get It. Although not scientifically studied, it makes sense that if you are steeped in the entrepreneurial environment and, even better, expose your child to aspects of it, your child is likely to benefit cognitively from that experience.”

From the perspective of a services professional, I can tell you that one of target client sets is young adults who have not learned the skills or organizing because their parents never taught them.  I believe that the entrepreneurial family is more likely to pass on skills that allow a person to be self-sustaining and more able to achieve their own goals.
From the perspective of a mom, I can tell you that my 4-year old helps me take care of the house because I expect that, and she’s learned to be part of the family team from an early age.  She’s also learned that there are times when you work, and times when you play.  She gets it now, and I expect that she’ll continue to grow into a person who can structure her own time to meet her goals.  Prioritizing is a critical life skill, so you can enjoy life more.
I’ve talked to at least three people just this week who said to me that their inability to prioritize is their biggest problem.  Successful business owners must prioritize, or they aren’t successful.  If we pass this trait or skill alone onto our kids, we’ve done our jobs as entrepreneurs and moms at the same time.  Ka-ching!

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http://recordings.talkshoe.com/TC-47195/TS-489340.mp3

Hear more about why I wrote this book, what kinds of economic benefit having your own business as a mom can offer, and what I think about balance.  My interview takes place the last 10 minutes of this hour-long show.  Enjoy!

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