HOW TO BUDGET AN IRREGULAR INCOME
A budget is simply record that keeps track of how much money you have coming in and how they are spent.
Budgeting is one of the most important tools in building financial stability and future because it helps you get the most out of your money.
Budgeting is beneficial to you as an irregular income earner because you stand a chance of financial success when you understand the inflow and outflow of your money.
These tips will help you get started:
1) Make a budget plan: You need to make a plan to budget in the month and hey do not do a mental math. Get a budgeting app to help you get started. SmartTeller app has a budgeting feature you can use for budgeting. This will help you to document your monthly income and expenditure. It will give you an overview of your cash flow for the month.
2) Start budgeting with the least you have: If you are a beginner or you earn commission on whatever you sell, estimate how your least income will look like. When you budget the smallest amount, you can always increase it at anytime
3) Prioritise your budget: Place your budget in categories starting with these four basically necessities: Food: including restaurant and refreshments, Shelter( this includes rent or mortgage payment, utilities, taxes and insurance), Clothing (Focus on what you need and not on what you do not need), Transportation (This includes your car payment, fuel and car maintenance). Once you have listed these four basically necessities, every other expenses should also be prioritised in order of importance. You can also add extra expenses once your basic necessities are covered.
4) Adjust expenses for the month: Just in case you have an extra income in the course of the month, ensure you add it into your budget before you start spending. Go back to the priorities you listed and decide where to apply that extra money or add new ones.
5) Save extra money: In the course of the month, you might have excess inflow of money try to save the money for the times when there will be little income. This can help you settle bills and emergency needs in future.
6) Start process over again: By the end of the month, you have successfully budgeted your income. Now apply the process all over again the following month.
