How to budget when income is variable is not an unusual problem. For instance, people who work on commission or many in the service industry do not know exactly how much they will earn each week. If you sell cars for a living and it rains 4 weekends in a row, your sales are likely to be negatively affected. If you are a waiter in Austin and UT students are on break, your income could certainly decrease. How is it possible to live on a budget?
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One way to budget for such careers is to determine how much you can honestly expect each payday and base your budget on that figure. For instance, if you are a caterer, you can determine how much income you can expect each month based on your working history. You know summers and holidays are strong, but that February and March are usually slow. Therefore, determine the minimum amount of money you can reasonably expect to earn each month. Maybe during wedding season, you expect to earn $10,000 a month, but there are months where you know you will earn only $6,000 a month.
Therefore, base your budget on an income of $6,000 a month. But have a plan for the months you earn more. Therefore, suppose you are saving for new automobile tires and you put aside $75 a month into a New Tire Fund. If you earn $6,100 next month, you could add $175 to your tire purchase. This plan forces you to live “within your means,” but also plans for those months when you earn above your budgeted monthly amount.
No matter what your financial situation, the Austin Financial Coach at Capital Budget Strategies, LLC, can help you create a plan to organize your finances and set you a path to winning your retirement!
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