Child Care Budget, Cashflow and Financial Projections

It’s hard to stay afloat in either business or personal finances if you don’t have, and follow, a budget. It tells you how much income you are bringing in, how much you are paying out in expenses, and what you have left over – your profit. If you don’t already have one, you need to develop one. It’s hard for many people when they first sit down to develop their budget because they have no real idea how much they are bringing in or what they are spending. It’s critical that you develop a method of record keeping and are diligent about recording your earnings and expenditures. For some people, the easiest way to do that is in a spreadsheet on the computer, for others, pen and paper are most effective. Choose the method that is easiest for you because if it isn’t convenient or natural, you won’t be able to keep it up.

When putting together your budget, be sure to include the following as well as any other income or expenses unique to your business and family:

Business expenses

Rent/Mortgage

Utilities, Phone/ Internet

Food

Payroll

Supplies and Materials

Liability Insurance

Quarterly Taxes

Marketing

Training and Conferences

Personal expenses

** Pay yourself first!

Car –car payments,

gas and insurance

Food

Childcare /Education

Medical

Credit Card/Loan Payments

Personal Costs – clothing, gym, and salon appoints, etc. Other – Be Sure to Allow for Children’s Activities, Special Events & Holidays

** “A phrase commonly used in personal finance and retirement planning literature that means to automatically route your specified savings contribution from each paycheck at the time it is received. Because the savings contributions are automatically routed from each paycheck to your investment account, this process is said to be "paying yourself first", or before you begin paying your monthly living expenses and making discretionary purchases.” --INVESTOPEDIA.COM


Enrollment in family child care is constantly going up and down. To ensure that you will be able to cover expenses if a child leaves without notice, I recommend that providers try to budget for one child less than they anticipate enrolling.

Cashflow Worksheet

Cash flow projections

Knowing how much you have coming in and going out allows you to project future cash flow, which makes it possible to plan for expansion or quality improvements. When projecting future cash flow, keep in mind that there are several issues and/or events that can affect income such as: Expansion, Natural ebb and flow of enrollment cycles, Economy, Changes in family/location/spouse’s income and Marketing

Long-term financial planning

Budgeting also makes it possible to plan for long-term financial goals. There are some steps you can take now to ensure stability and security when you are ready to retire. Remember to **Pay yourself first! Saving even $25 a month can add up, and if you put nothing away now, you have nothing later. I would advocate that paying yourself first also includes investing in insurance. Life is full of uncertainties and investing in Liability, Home, Renters, Auto, Health or Life insurance today, could prevent you from losing everything in the future.

Child Care Finances Handout
Finance Terms and Definitions

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