Since most people don’t grow up with a complete understanding of how to manage their money, concepts like budgeting and personal finance can seem restrictive because they are.
Listen to the Podcast
A concept that’s not commonly addressed is irregular income. Whether you’re a waitress, a freelance writer, or a realtor, irregular income can be tough to adjust to. Thankfully, there are some practical ways to master your irregular income. You can use these fun family tips regarding erratic finances even if you have a family.
1. Know Your Baseline
For each month, there are a few fixed expenses. For example, your rent/mortgage stays the same each month. However, specific bills such as gas, groceries, and utilities will always appear. So, first, look at the amount you’ve spent on those expenses. Then, as you consider your basic needs, use the dollar amount to create your baseline.
Even with fluctuations in gas prices, water bills, and more, use the baseline to understand how much you need in your account to cover your daily operations. Keep the baseline expenses in a separate account that you don’t touch. Often, people get into trouble when they use baseline money to cover unplanned expenses. As you get various paychecks throughout the month, make sure that a certain percentage always covers the baseline expenses immediately.
2. Plan Ahead
If you have children interested in extracurricular activities, don’t wait until the school year starts to search for the money. Instead, start by putting aside a certain amount of money each month. Then, whether you’re preparing to pay for summer camps, band lessons, or soccer cleats, plan by always putting a certain amount in that account. By planning, you won’t have to deny your children all the wonderful experiences because you didn’t have the money.
If the budget is tight now, do your research to plan for experiences or activities that aren’t as expensive. In some cases, scholarships are available for certain activities. The concept also applies to you. If you already know you’ll want to go out to lunch with friends, plan for those purchases by putting the money aside.
Even if you’re not going out to lunch with your girlfriends this month, you’ll be ready when they’d like to go the following month. In addition, when you plan with your current money, you’ll eliminate the issue of operating from paycheck to paycheck.
3. Focus on Habits (Not Willpower)
Financial experts will frequently focus more on the need to be disciplined to get good results with an irregular income. However, if you’re not a disciplined person, it will be a long-haul challenge. Instead of focusing on the need to build willpower and discipline, focus more on your habits.
If you’re someone who enjoys pizza on Fridays, don’t break the habit of buying pizza for the family on Fridays. Instead, find ways to decrease the amount you spend. For example, slash it in half instead of spending $40 on pizzas and the delivery and buy frozen pizzas for $20. Then, with a sprinkle of parmesan cheese, your family won’t feel like they’re missing anything.
If you’re used to spending $200 at the local spa for a massage, consider looking for a masseuse who provides the same service for $60. Yes, it’ll come without the bells and whistles of a luxurious spa visit. However, you’ll get the service you need. In addition, by creating less expensive habits, you’ll be able to reallocate that money to serve your family in better ways in the future.
4. Decrease Your Expenses
There’s no way to avoid a closer look at what you’re spending money on. Certain expenses don’t need to be in the budget at all. If you’re paying for cable and all online streaming services, look for ways to bundle and get a better deal. Pay attention to how much gas you’re using each month to get around. Pay attention to how many places you can travel by either walking, riding a bicycle, or using public transportation. While convenience is nice, gas is still really high. By remaining mindful of how you can creatively decrease your spending, you’ll see more money remain in your bank account to stabilize your irregular income.
Times will come when the answer is no. That’s okay. Even though it’s nice to provide your children with the best experiences, it’s also okay for them to be bored, read a book, or enjoy time at home. Every day won’t necessarily be a great adventure outside. That’s okay. Learn to work through any lingering guilt that’s associated with saying no.
5. Focus on Experiences
In many cases, you don’t need a lot of money to have lots of fun with your family. In most cases, the memories are what matter the most. The key is creating fun experiences that don’t cost much money. When you focus on experiences, you don’t need to spend as much on material goods. Prepare and pack up sandwiches, chips, and drinks for dinner. Put the whole family in the car, and head to your community’s local outdoor movie screening. It’s a great way to get outside, enjoy good food, and remain entertained.
Instead of taking the children to the local arcade daily, purchase a bunch of sidewalk chalk for $10. Let them have fun as they create artwork. Create a paint night where the family can paint together, listen to music, and connect. Build a supply box of arts and crafts they can pull from during downtime. Instead of purchasing books from online retailers, head to the local library to check those same books for free.
As you become creative with the experiences you all enjoy, you won’t need to spend as much consistently. When you’re ready to take the entire family to see a movie or out to dinner, it won’t break the bank account until your next paycheck because you typically focus on less expensive experiences.
6. Intentionally Splurge
If you have young kids and want to visit Disney World, plan for it. Don’t just scroll through photos of people taking their children to Disney World. The time will pass. Make plans to splurge on the things and experiences you want intentionally. If you’d like to make sure the family goes on a vacation each year, this is a great way to spend time together as you all enjoy each other consciously. Make plans within the scope of your budget.
Depending on the costs, it’d be wise to plan a year or two. After that, you might decide you’ll need a second job to afford those extra luxuries. However, it’s just as important to play hard when you work hard. If you don’t, you will burn yourself out. When you don’t get to enjoy the financial journey, you’ll end up falling off the wagon and remaining in the same cycle.
Financial expert T. Harv Eker refers to a “blow jar” as a portion of his budget that goes to any nice thing or experience he wants. Often, a splurge is associated with spontaneity. However, you can plan your splurges. As long as they don’t get in the way of your financial management plan, it’s important to splurge.
The Commonality of Irregular Income
With more people entering the world of entrepreneurship, irregular income is a concept that more people continue to adjust to. It’s not as uncommon as you might think. However, your irregular income doesn’t have to feel like a never-ending cycle of lack. When you utilize these tips, you’ll gain a better understanding of your finances. You might discover that you need to find or build more income streams because even with the right budgeting tactics, you don’t have enough to cover your baseline. You might discover that poor spending habits and a lack of discipline keep you behind. By readjusting, planning, and honestly reflecting, face your irregular income to create a better financial future for yourself and your family.