Please help me understand finances!

[Auroraskylar]

Hi there, I am hoping some of you can give me a little advice. Thank you in advance for anyone willing to read my rambling post!

Childminding is something I have been thinking about for the last few years, however there is one thing really holding me back. I simply do not understand finances - I am completely useless when it comes to money, bills, budgeting etc. I have read various forum posts about how much childminders earn to see if I can figure out if it is a career choice I could seriously take on, but my mind immediately turns to mush and I just do.not.understand. I confess, I am completely stupid when it comes to this stuff (I'm not stupid in all areas of life, I promise!)

I was hoping someone could explain to me how childminders earn their wage, as absolutely simply as you can put it. I am going to include some personal information to give you an idea of how I am stuck (judge away!) So, here goes.

My partner and I bring in a combined wage of approx. £1700 each month after tax. We live month to month. He earns around £900 and i £800. We are low income, however we get by, *just*. This is how much we need to have in our bank account to make sure our bills get paid and we eat. We generally do not have any money to save, to spend on luxuries and we do not go on holiday. I need to be able to understand how much I should be charging and how many children I need to be looking after in order to bring in approx £800 per month, in order to cover our bills. Of course, I would like to earn more than that!

In the posts I have read so far, every one talks about what they have earned over a whole tax year, and what profits they have made. Most of these people have given numbers such as £5000 and under for a tax year. Is this how much money they are left with to spend on whatever they want AFTER all bills have been paid etc? Or how much they have brought in completely, over the whole year. Can you see how I am confused? I hope I am making a little sense!

In my area, the going rate is £3.50-£4.00. I have not gone as far as market research yet, as I do not know if this is something I could potentially do yet.

Any advice/info is MUCH appreciated!

[Rick]

Hi

Budgeting for your childminding business should be part of your LA course. I had never owned a business but I managed to do it with little fuss.

When people talk about profits you have to remember that childminders can deduct quite a bit from their tax bill through expenses like wear and tear, food etc etc.

Here is some info regarding registering as a childminder. http://www.childmindinghelp.co.uk/forum/starting-childminding-pre-registration-visits/117176-registering-childminder.html

Continue your research into childminders fees around you as you need to be competitive.

Good luck :thumbsup:

[unalindura77]

Don't worry you aren't alone. It can be quite scary and confusing starting up your own business and discussing fee's with parents and even deciding on your fee's in the first place, but it gets easier.

Where are you based?

Have you looked at your local authority's website to see what others charge?

A friend of a friend earned 37,000 last year. Another friend earned 26,000.

It all depends on how much you put in to it, which is another thing, starting out costs. I am in the process of registering and have gone mad buying things and decorating my home to have it ready but I have saved myself a bomb by buying things on ebay, amazon etc.

On here you will get lots of help and advice so you're in the right place!

[funemnx]

Work out how much you could potentially earn;

Hourly rate - £3.50 per child per hour

Opening hours e.g Mon-Fri 7.30-5.30 = 10 hours per day

If you were full - 3 x under 5's full time (50 hours per week each) + 3 x school aged (17.5 hours per week each)

That would mean you earned (£525.00 + £183.75) £708.75 per week at maximum capacity

That is if you are full - it can take a long time sometimes to build up some children to mind and often they are different hours and you might not be able to fill all your spaces (your own children under 8 come into your numbers).

[CLL]

I will give you my simple example. I charge £4.25 per hour. Which equates to £40 per day from 8-5.30. I have 2 children full time. So £200 per week per child is £1600 per 4 weeks. I don't have any after school kids either so you could make extra if you wanted to. I then need to take my expenses off this and allow for tax payments. So I still have over £1000 per month as my wage. My expenses are high at the moment due to start up costs but should level out to about £300 per month.

[Auroraskylar]

Thank you all so much for replying to my rant, I really appreciate it! And you have cleared up a few doubts in my mind - when people throw in phrases such as 'pre tax profit' and 'expenses' I get so confused. And for the posts I read about childminders 'making £5000 for the tax year' I can only assume this is extra money they had left after they paid all their bills/just lived, if you get what I am trying to say.
So, thanks again :) I have a little more confidence in pursuing this a little more now!