How do you develop a budget if your income keeps changing? Companies are using more contract workers these days and that often means irregular hours and pay. Budgeting on a variable income isn’t hard if you know a few tricks.
Developing a budget isn’t difficult if you know how much money you have to spend. But what if your income keeps changing? Then what do you do? Companies are using more contract workers these days and that often means irregular hours and pay. Well, budgeting on a variable income isn’t hard if you know a few tricks. Rob shares them with you on this MoneyWise.
Spending less than you earn is the key to every financial success.
Applies to everyone whether you make a little or a lot.
Imperative for the Christian to wisely manage the resources given you.
Format for your spending plan is up to you (pencil & paper or digital)
Begin by tracking your expenses for 30 days.
Think about non-recurring expenses and add them in
Take that 30 days of actual spending plus the non-recurring and build a budget by category.
Bring the budget in line with your income.
Decide who manages the budget going forward.
If you're married, consider having a weekly money date.
Now, to track variable income
Start with your average monthly income for the last six months.
In the months that you earn more, keep the excess in savings to fund the lean months.
Consider depositing all of your income into savings and then transferring only a set amount each month for living expenses.
Every six months, reassess your average income for the period and make necessary changes to your budget.
Next, Rob answers these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:
Is it wise to take out a mortgage against a home that's debt free and invest the money to pay the mortgage as well as earn more interest?
If you've heard of some "CD brokers" paying 2.76%, should you consider working with them?
If you have about $26,000 (some of which is your emergency fund) in a credit union saving account that is earning very little interest, is there a better place to look?
Is title insurance something you should look into and what is "title lock" insurance?
If you're 64 years old, owe $12,000 at 2.9% on your house, are there reasons to consider refinancing?
If you're 68 and were planning to retire but changed your mind and will now, continue to work full time, you currently receive $2,600 per month from Social Security, will continuing to work affect your benefits?
If one of your credit cards was hacked, the credit card company notified and took care of $3,100 of fraudulent charges, can the merchants take any action against you?
Where can you get more interest than what CDs currently earn?
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