Employment vs Self-employment

Q & A

Hi Gail: First of all, congratulations on your TV show. My husband and I are big fans of yours. We are both 30, are doing really good financially, no debts, a mortgage to be paid off in 2011, RRSP accounts, some savings. My husband is currently on a contract, which is ending in March (no benefits, no vacation and makes about 45 K annually). I was doing good as a full-time translator for an accounting firm but they closed down my department and I decided to make the move into self-employment this fall. I used to make 56K annually and because my own business is still pretty new, I am making very little money right now. I am worried that this was a bad financial decision as we now just make enough to pay the bills but not to save or enjoy life. Also, we would like to have a baby soon but being self-employed I am not entitled to a maternity leave. Should I go back to work full-time and have this baby or give my new self-employment gig a chance?

Name withheld

Wow! Big question!

Isn't it amazing how things change in life. One day everything is going along, hunky-dory, and the next you're wondering what happened!

Whenever you make the leap to self-employment, you're taking a chance and you have to learn new coping skills. One month you'll make tons of money, and the next nothing, zip, zilch! I've been self-employed since I was 25 and know about feast or famine. I also had both my babies while self-employed and was not entitled to mat leave benefits. So I had to set aside enough money to see my budget through my non-working months. And I had a shortened mat leave.

You have some choices to make here:

Do you really want to be self-employed? The pros: you are the primary determiner of your own success; you're in charge of your time; you can work as little or as much as you want to. The Cons: You get really tired. I used to get up to write at 4:00 a.m., wake the kids for breakfast and school at 7:00, walk them to school, work from 9:30ish until 1, have some lunch and a 20 minute kip, work some more, pick them up from school, make dinner and crash!

Are you willing to give up the full mat leave in order to have the flexibility of being self-employed, which comes in very useful if the kids get sick, there's a school field trip, or you just want to go to the beach?

Will your husband get a good job to replace the one that's up so you aren't pushed to using credit to fill the gap?

Could you work part-time corporately while you build your own business?

How long are you prepared to put off having children?

I think if you answer these questions honestly, you'll have your BIG answer.