Irregular/Seasonal/Cyclical Income Budgeting – Part 01

 

There is a large group of folks whose family economy is powered by irregular income.

Real estate agents, hair stylists, commissioned salesmen, and business owners all experience cyclical income.

Folks who live with this type of income often tell me that it is impossible to budget.  They say that they have no idea what they will make this month, so it is just impossible.

I say that not only is it possible, but that folks with irregular income need a budget more than anyone!!!

In this series of posts, I will explain how to budget with irregular income.  Here's a hint – It's EZ!!!

Step 1 – Recognize it!

You must recognize that you have irregular income!  If you have ever starved to death during the "off" season, you KNOW what I am talking about!  In order to stop having your life severely impacted by "off" seasons, you must prepare!

Question of the Day:  If your family economy is powered by irregular income, what do you do to prepare for "off" seasons?

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2 Responses to “Irregular/Seasonal/Cyclical Income Budgeting – Part 01”

  1. Mark Asbell August 27, 2007 at 5:50 am #

    I can’t wait to read what you’re going to write about this subject.

    As for the question – my best tweak to what you’ve taught is to have a “carry over” fund in addition to an “emergency” fund and to use the carry over fund to lessen the impact of valleys. Also the way I look at the budget for 3 months out because that is how far out I know exactly what my income will be based on basically accounts receivable. If it looks like I’m going to hit a valley over the next few months I plan my spending/saving accordingly to make the carry over fund last and focus on working to come out of the valley with more income.

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