Dear Jen,

I have separate business and personal accounts, but I've never formally paid myself in a pre-planned way. I've just moved however much makes sense based on my business and personal needs at a given time. Should I make the shift to establish a 'salary' for myself each month? Why? Where should I start?"

Dear Business Owner,

Thank you for your question, and first — big congrats on having separate personal and business accounts. That's such a huge first step in being able to understand your business finances and personal finances as two separate entities. It's very common for self-employed people to transfer their "owner's draw" on an "as needed" or on an "as available" basis. For some people, this method works totally okay. And for other folks, they are seeking a bit more security and stability of being able to pay themselves a consistent paycheck from their business.

Paying yourself a consistent salary from your business is totally possible — however it may take some time to build up the reserves that make it possible. Having a reserve in your business account is important so that you're able to maintain paying yourself your salary, even if there is a slow time in the business. Having inconsistent income as a self employed person is very normal. However, with financial planning we can smooth out the inconsistent income by paying ourselves and average wage... consistently.

Reasons folks might want to consider paying themselves a monthly salary include:

1. Predictably:

When you pay yourself a monthly salary, it can be easier to manage your personal spending and savings plan because you know how much money you'll have coming into your personal account each month.

2. Priority:

When you commit to paying yourself a salary from your business, you are prioritizing yourself and your time in your business. This means your business model, expenses and overhead all need work in alignment financially with your salary.

3. Planning:

When you pay yourself a salary, you need to plan financially to the commitment to pay yourself. This means you'll need to track your sales, revenue, and pay close attention to how your marketing is working.

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If you're ready to take control of your finances as a birth worker, join me on January 8th for the Intro to Budgets + Birth Work class! We'll cover:

• Creating a personal budget with a variable income
• Separating personal and business finances
• Setting sustainable pricing strategies

Start 2025 with confidence and clarity in your financial systems. Don’t wait — register now and take the first step toward a financially secure year ahead!

Warmly,
Jen Mayer, AFC®

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