Tamar has just graduated from college and has worked at various childcare centers throughout high school and her undergraduate years. She knows right away that she wants to open up her own daycare. Luckily, she has no debt of any kind and can keep working at the childcare center she is currently employed at for as long as she would like while she saves money. What type of expenses should Tamar try to save before starting her business?

Question

initial business expenses and living expenses

living expenses and variable expenses

discretionary expenses and fixed expenses

salary expenses and discretionary expenses

Answer 1

Tamar should focus on saving for initial business expenses and living expenses before starting her daycare.

1. Initial Business Expenses: These include costs associated with setting up the daycare, such as:

   • Licensing and permits
   • Rent or mortgage for the facility
   • Renovations or furnishings
   • Insurance
   • Equipment and supplies (toys, educational materials, safety equipment)
   • Marketing and advertising

2. Living Expenses: These are the day-to-day expenses that Tamar needs to cover while getting her business off the ground. They may include:

   • Rent or mortgage payments
   • Utilities
   • Groceries
   • Transportation costs
   • Health insurance

By saving for both initial business expenses and living expenses, Tamar can ensure that she has a stable foundation to successfully launch and operate her daycare.