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. Today on MoneyWise, we’ll share a few tips to help you budget on an irregular income.
It’s nearly impossible to stay out of debt and save without a spending plan.And as a steward of God’s resources, we have a stewardship responsibility.
And this applies to everyone, whether you make a little or a lot. Proverbs 27:23 reads, Know well the condition of your flocks, and give attention to your herds.
FORMAT OF YOUR SPENDING PLAN
Now, the format you choose for your spending plan is up to you. You can use pencil and paper, or you can take a digital approach and for that we highly recommend you check out the newMoneyWise app.
No matter which approach you choose, begin by tracking your expenses for 30 days.
CAPTURE EVERYTHING FOR 30 DAYS
Capture every expense no matter how small. Then, think about the non-recurring expenses and add them in with a monthly amount needed to have what’s necessary when that expense rolls around. This would be quarterly insurance payments, annual HomeOwners Association fees, vacation expenses and your Christmas fund.
Then, take that 30 days of actual spending plus the non-recurring expenses and build a budget by category.
Once you take a first pass, you’ll need to do the hard work of bringing the budget in line with your income and making sure that your spending reflects your goals and priorities. If it doesn’t, start cutting back and making changes.
WHO WILL MANAGE IT?
You’ll also have to decide who manages the budget going forward, Husband or wife?
Sometimes the more detailed, organized person is the wife, sometimes it’s the husband. You’ve got to figure out what’s the best approach for you.
You can have one person being the bookkeeper, but both spouses need to be in on the plan and should communicate regularly about money.
VARIABLE INCOME
Here’s what you do about variable income: Start with what you do know. What was your average monthly income for the last six months?Can you reasonably expect to earn the same amount in the next six months?
The goal is to arrive at a budget that can be covered by the average (or slightly below average) amount you expect to earn each month. In the months that you earn more, keep the excess in savings to fund the lean months.
You may also want to consider depositing all of your income into savings and then transferring only a set amount each month for living expenses. Then every six months or so, reassess your average income for the period and make necessary changes to your budget.
LISTENER QUESTIONS On today’s program, Rob also answers listener questions: ●Is it wise for a church to invest in mutual funds or even real estate? ●Would it be wise to invest in a duplex? ●How can you close credit card accounts with minimal impact to your credit score? ●When you get married, are you liable for debt accrued prior to marriage in the other person’s name only? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them toQuestions@MoneyWise.org. Also, visit our website atMoneyWise.orgwhere you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.
Like and Follow us on Facebook atMoneyWise Mediafor videos and the very latest discussion!Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking theDonate tab on our websiteor in our app.
To support this ministry financially, visit: https://www.oneplace.com/donate/1085/29