If you're not making a regular income, don't let this stop you from budgeting.
If you're not making a regular income, don't let this stop you from budgeting. LearnVest shares how to budget when you're not making dough consistently. Successful budgeting tends to depend on two things: careful planning and a steady income.
The first, anyone can do. The second isn’t so simple.
If you’re self-employed, you might be asking yourself: “But I don’t have a regular paycheck coming in. Can I even set up a budget? Should I bother?”
You can. And, yes, you should.
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A budget is simply a way of figuring out how much money you need to go about your daily life, and arranging things so that you don’t exceed that number. No matter your situation, budgeting is a critical part of making sure your finances are sustainable. (And it no longer requires a pen and paper: The free LearnVest Money Center and corresponding app will do it for you automatically.)
Budgeting is especially important if your income is irregular, such as if you’re a freelancer, a temp worker, a consultant, an artist, a permanent employee with fluctuating hours, or a commissioned salesperson. Or if you do seasonal work, if a big part of your income depends on tips, if you own a small or startup business, if you’re on call, or if you are simply an odd-jobber, then this article is for you.
Use this simple three-step plan to set up a budget you can stick with. For more guidance, LearnVest offers low-cost financial plans, put together by our certified financial planners™.
Step One: Know Your Baseline
When you have a steady paycheck and a predictable income, you budget by allocating spending categories within that limit. But those with unpredictable incomes must work “backward”—starting with the amount of money you’ll spend to figure out how much you need. If your income is unstable, then it is your expenditures that must be stable, predictable and repeatable.
Read on for more.