Budgeting is one of the earliest and most important aspects of personal finance. The basics of budgeting is simple. However, each persons financial situation is different so a one size fits all sort of budget plan does not work for everyone.
If you are a person who has an income that is not always the same, the standard budget can be a little hard to maintain. The following are some great tips for how to manage budgeting when you have a varying income.
1. Try to keep an average income to work with. If you can come up with an average income, either an actual average of your income or the minimum amount you can make, if know, then use that as your income on your budget.
2. Learn to be flexible. You have set expenses and then you have variable expenses. Learn to be able to adjust your variable expenses to meet your income so your budget is always balanced.
3. Keep on top of things. You should always look over your budget each month, but with a varying income, you need to do this often. This will allow you to stay on top of your budgeting and ensure you are keeping things in check.
4. Know the bottom line. You should always know that magic number – the amount of money you must have every month. Once you reach your magic money that will meet your basic needs then you can rest easy knowing you have the needs met and now you only need to worry about working with what you have left.
5. Try a weekly budget instead of a monthly budget. You may need to work your budgeting into a weekly plan. To do this, take the amount you must have and divide by four. This is what you must have each week in order to meet your expenses for the month. This will be put back immediately. Then you can budget out your expenses for each week. This may help if you are paid each week.
Budgeting with a varying income can be difficult. It can take some time to develop a style and method that works best for you and your situation. Do not forgo a budget, though, because it is too hard. A budget becomes very important when you can not count on a certain income each month. It will help you to stay in control of finances, so work at it and stick with it.