How to Manage Your Budget on Irregular Income
When you have an irregular income, it’s not easy to plan with your money. You mostly don’t know what to expect for the months ahead. If luck is on your side, you’ll make more money on a particular month but get nothing in the following months.
To avoid getting stressed when things don’t go well, you need to budget for the little you get. How do you manage your budget? Here are simple tips to help you out.
Have an Emergency Fund
Having some funds set aside for emergencies is very crucial. Such situations don’t know your dry months, and the best thing you can do is prepare for them. The best way to save for emergencies is through automatic billing whenever some money gets into your account.
You should always know that bad months are always there for people with fluctuating income. The worst thing is that emergencies can’t choose a better time but when you have nothing. With some ample savings, you’ll easily fill the gaps and get back on track.
Calculate Your Monthly Lowest Income
Make sure you understand how much you can make on a bad month. The best way to do this is to calculate your average income. This way, you can neither go too high or too low.
Go through your previous year’s total income for every month and peak the lowest. Once you estimate what your lowest month will look like, you can budget from there.
Prepare a List of Your Expenses
You need to have a clear list detailing all your monthly expenses. The list should start with basic needs such as food, shelter, and transportation needs. This should also contain your insurance fees, payday loan online and saving goals.
If you still have some money left, budget for non-essential needs such as TV subscriptions, restaurants, and other personal spending. Have a budget for all these expenses, and keep track of how you spend on them.
Adjust Accordingly
Staying comfortable with your irregular income also involves being ready to adjust. If your income for the month is lower than you planned, you must know how to adjust to living with the little. You can even forego all the luxuries for a while.
If, by chance, you make more on the following month, add some money on your expenses. This will be a nice way to cover up for what you missed when your earnings were closed to dry.
Live on the Income for the Previous Month
With irregular income, you always know what’s coming ahead. There is no consistency in the money you receive for the next month. But even if you get a very small amount, you should never dip your hands into your savings.
But if you manage to make enough money for consecutive months, don’t spend it all. You should still be able to live on what you made the previous month. This means the rest of the money will go to your regular checking account. Have a saving account where you can always put extra income.
