Irregular/Seasonal/Cyclical Income Budgeting – Part 04

This series of posts has been focused on how to manage the home economy when it is powered by irregular income.  It is my goal to help you eliminate the feast/famine lifestyle (especially the famine part!!!).

Before we focus on today's step, let's review the previous steps.

Step 1 – Recognize it!  To avoid living the feast/famine lifestyle, you need to recognize that you are earning irregular income.

Step 2 – Determine monthly expenses   It is important to understand how much income is necessary each month to ensure that the household operates smoothly and free from the feast/famine lifestyle.

Step 3 – Save up at least three months worth of expenses  This is your buffer that absorbs the wild patterns of your customers!  It allows you to live life smoothly without the feast/famine episodes!

Step 4 – Become personally debt-free and operate your business debt-free

Now, I am certain that you believe I have completely fell off of my rocker.  You might be saying, "Joe, you are crazy!  There is no way I can do this!"  Well, I have seen many people operate their business debt free.  Let's take a small company like, say, Walgreens.  They do only $47 BILLION in business each year.  Small company.  Yet, the operate DEBT-FREE!!!  Don't believe me?  Pull up their balance sheet right HERE and see for yourself.  You will see that short-term and long-term debt are $0!!!

What are the advantages of operating a business debt-free?  Let me count the ways!

  1. Monthly expense load drops!  There are no interest payments to make!
  2. You business can absorb downturns much more effectively.  Again, there are no interest payments to absorb!
  3. Breathing room.  It is amazing how much stress a pile of debt brings on.
  4. When you spend your own real money, you will manage it better.  I don't know why this is, but if I am spending someone else's money (i.e. the banks) I am much more susceptible to make a riskier decision!  When I am spending my money, I am much more likely to do thorough due diligence before doing a deal!

Question of the Day:  What are some other advantages of operating a business debt-free?

I am PUMPED UP about some announcements I will be making over the next few posts!

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.


  1. Keith on August 30, 2007 at 6:20 pm

    I became debt free except for my house back in 2004 and was able to put six months of living expenses in the bank. Unbelievable! It’s not financial freedom but it sure lets you breathe a little easier each day knowing you have a little cushion should/when life throws you a curve ball. The best thing about the emergency fund…it’s still there and it’s grown to be more than a six month cushion….

    You are right on target!!!

  2. Jon Smock on August 31, 2007 at 8:15 am

    Joe, this might possibly be my favorite set of posts of yours. Great practical advice, and extremely clearly presented. Thanks!

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