Living With Fluctuating Income

Life gets more challenging when you’re living on an irregular income.  What can be done to budget household finances when they’re finicky?  Be conservative in your income estimates and plan ahead for expenses.

 

Clearly, budgeting is the key to survival.  Most modern finances are based on monthly payments.  Therefore, a monthly budget needs to be established, even if that is not how the income is received.

 

One method to determine monthly income is to add up the income received over the last three years and divide by 36.  You can then develop a budget based on income projected from past experiences.  In months when you earn more than the budgeted amount, the excess should be saved to be available for times when you bring home less than your projected income.  It’s not a good idea to count on expected overtime or bonuses as income.  Experts suggest gearing your lifestyle and spending habits to a conservative estimate of your income.