How To Budget On A Variable Income

If you are self-employed or work on commission, you may be faced with a variable income, which is not always easy to budget. This variable income can make navigating expenses, especially in times of uncertainty and upheaval, as many of us are facing today, extremely difficult. Many have experienced the loss of a job or a reduction in hours, causing more individuals to live on a variable income. Now more than ever budgeting is important. Here are some tips to help you.

Take the time to list out all of your monthly expenses, both fixed and discretionary. This will give you a good idea of how much money you'll need to stay on track. It will also show you where you could cut expenses if needed.

It's important to prioritize your basic expenses first - food, shelter, electricity, and health coverage. After that you can add in your debt payments and funds that you should put towards savings. Once those expenses are covered, you can budget for things like clothing and entertainment and other discretionary items that are more "wants" than "needs".

An emergency fund is key for any household, but it is even more important for those with variable income streams. When you are light on income one month, the emergency fund can help balance this out by providing the excess cash needed to pay the fixed expenses. It is important to contribute to the emergency fund in months with excess income to ensure you can cover slower periods. One helpful tip is to try and save at least 10% of your earnings each month to your savings.

Sometimes even with budgeting, more help is needed. Look into relief funds that can help you in uncertain times. You can visit this website for details regarding disaster financial assistance. Don't forget about the government stimulus check, which once received can help towards relief as well.