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The 'How To' Of Budget Planning With A Variable Income


Budget planning for many people who have a variable income can be a challenge. Maybe they are on a base wage with a commission added when they sell something. Maybe they just have casual work that varies from week to week in the number of hours worked, thus the income earned. For these people budget planning may seem difficult to set up, yet it is even more necessary than someone with set earnings.

If you have a variable income - for whatever reason - and you want to set up a family budget, you should look back at your pay stubs for several months and see what the lowest amount was. Use this amount to calculate your income. In other words, consider that this is the amount you get every month and work from there. That way, you'll have some left over from the good months, that you can keep in a savings account to use during those months that may be even leaner than your lowest so far.

If you have a base salary, and then get commission on sales, you should work out your family budget entirely on your base salary. This means that your utilities and other monthly expenses - the bills that 'have to' be paid, such as rent, food and utilities, should all come out of your base salary.

No matter how low your pay is, try and set aside a small amount to save every month. If you income is totally variable with no base salary, try and slowly save up enough to cover one whole month's worth of bills so that you'll be covered during a lean month. Transfer this money into your checking account at the beginning of the month ready to pay your bills, then bank your pay checks into your savings account, ready to be transferred into your checking account at the beginning of the next month. In this way, you will know that there is enough there to cover your bills and any emergencies that might arise.

Once you know you've enough for your basic expenses, prioritize your other bills. Remember that money for fun and luxuries should come last on your list of priorities. There may be some months that you don't have any, but if you've paid your bills, you can hold your head up high. It's a good feeling to know that you are independent and can control your money, rather than letting it control you.

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