Developing a budget for the non- wage earner

ImageYou have often heard it said that one should have a budget .  A budget is a plan that guides our spending habit. However, for the freelance and small biz owner where income is not consistent, where do you start. You might budget $400 for food, but  $400 ends up being more than one fifth of your budget that month. So what do you do when your wages cannot be predicted on a weekly or  monthly basis?

  1. Project:  For people with non consistent income a budget is even more helpful because it helps you level your high earning days with your low earning days. , it is best to start by honestly estimating what your annual income will be based on projected or past demand. If the amount you project is not enough to meet your living needs then a part time job might be needed till your business or freelance job is able to fully support you.
  2. Be thrifty:  In the first few years when your business is still striving to break even, it will be best to be thrifty about what you spend. Being thrifty frees you up to spend time promoting yourself while spending less.
  3. Income smoothing: save the extra in months when you make more than needed
  4. Using all the above techniques, income and expenses can be moderated throughout the year.

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