Are you currently living with irregular or seasonal income? Interested in learning how to prosper while earning irregular income? It is my goal in this series to help you stop living the feast/famine lifestyle that is so often associated with irregular income. As we focus on today’s step, lets review the previous step.
STEP ONE Recognize it!
To avoid living the feast/famine lifestyle, you need to recognize that you are earning irregular income.
STEP TWO Determine monthly expenses
One of the key steps to budgeting is knowing how much income is necessary each month to keep your household running smoothly. That is why it is so important to determine your monthly expenses.
To determine your monthly expenses, you should pull up a monthly budgeting form and enter the following:
- Fixed Expenses – Enter all of your fixed expenses – house payment, utilities, car payments, credit card payments, cell phone, childcare, etc. This also includes SAVINGS!
- Variable Expenses – Enter the average of all of your variable expenses – gasoline, groceries, clothing, spending money, entertainment, dining out, etc.
- Known, Upcoming Non-monthly Expenses– This is a KEY STEP!!! If you do not add in all of those known, upcoming non-monthly expenses, you will continue to live the feast/famine lifestyle (more likely the famine lifestyle!!). These type of expenses are BUDGET-BUSTERS. Here is what I do. I list all of the known, upcoming non-monthly expenses and place their annual cost next to them. Then I divide that number by twelve to determine how much I need to save per month. Lastly and most importantly, I set up that amount to be auto-drafted into my Online Savings Account, Capital One 360. (If you’re looking for an Online Savings Account, just click HERE).
==Known, Upcoming, Non-Monthly Expenses Example==
So in this example, I would include a line item of $483 in my monthly budget for Known, Upcoming Non-monthly Expenses. This would allow me to bring a stop to the feast, famine lifestyle!! You now have a monthly budget that will change very little throughout the year and Step Two is complete!
Stay tune for Step Three where we’ll tackle the toughest part of irregular income – having enough cash on hand when you need it.