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How to Create A Budget With Variable Income

By Edited Nov 13, 2013 0 0

4 years ago, I joined the ranks of the self employed and suddenly my income became less than predictable month to month.  But you don't have to be self employed to have a variable income.  Many people in sales or other commission based, or results based employees understand that it can be really hard to budget your money responsibly every month.  I have a few tips for you to help you grow your savings, budget your spending, and come out on top, even with a variable income. 

Start your budget by writing down all of the expenses you have.  As you go through this coming month, continue to write down every penny you spend, so that you know where everything is going.  For those bills such as insurance premiums, car maintenance and home repairs, figure out how much you spend in a year, and divide that by 12 months.  Then you can use that number in your monthly budget.

Next, write down the expenses you have in order of priority.  Of course, this means that your rent, groceries and utilities come first, probably followed by car payments, followed by what things are important next for YOU.  You are making your budget, it's not mine!  Included in these expenses(probably near the bottom) are also items you want to save up for.  Hopefully the needs of your life will fit into what you typically make each month, and if not, you've got some decisions to make in order to pay the bills.

The next thing you want to do is build up 1 month's worth of savings if you don't already have it.  This enables you to have a small buffer in your budget, so you don't have to live paycheck to paycheck.  After that, you are able to start using your budget fully.

 As you go through your month, take all of your paychecks to the bank and deposit them, keeping the pay stubs handy for the end of the month.  At the end of the month, add up how much money you have made, then go down the budget list and use your money to fund as many of the items as you can.  One of these savings goals that would be good to build up is an income buffer, or a pile of cash that you can dig into during a slow month.  This is especially important if your income is seasonal, or even somewhat seasonal.

Use this budgeting method to make your money work for you this year, instead of the other way around!  You'll feel more free after a few months.  After a couple years of using this plan, I couldn't be more financially free, not having to worry about where the money is going to come from!



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