There are several professions that do not have steady income. Those professions include salesman, contractors and entrepreneurs. Typically, these professional either work for a percentage of their sales or for profits, and both payment methods can be very sporadic.
The sporadic nature of these professions makes it very difficult to budget. I should know. I work as an independent contractor doing administrative work and webpages.
Bills Before Income
If I worked a normal job, I'd calculate my monthly income before I calculated my bills. However, I can't do that when I don't know my income. What I need to find out is the minimum amount of cash I need per month, and that's starts with my bills.
I have six bills that have to be paid every month. Those bills include my rent, internet, cell phone, car insurance, electricity and gym membership. Those bills total $825 a month.
Food And Gas
Since I don't precisely know my income, I have to estimate my food and gas. I can't simply subtract my income from my bills and use the leftover amount for these items. Typically, I need a minimum of $30 a week for food and $15 a week for that. This comes out to $180 a month.
My bills, food and gas are $1,005 a month. This is the minimum amount a month that I can live off of and make ends meet.
Since I don't know my specific income, the only thing I can do is figure out how much money per day and per week I need to survive. The calculation I use is $1,005 divided by 30. The 30 is the number of days I need to work every month, and my daily income needs, using this calculation, are $33.50. My weekly amount is $234.50.
Worst Case Scenarios
Next, I need to figure out what I'm going to do if I don't average $33.50 a day or $234.50 a week.
Once of my temporary solutions is to split my electric bill. I tend to do this every other month, and it saves me $50 on the months I'm able to split the bill. This is a fast way to cut $50 out of my monthly budget. However, I can expect my next electric bill to be $50 higher, and I have to pay that amount. I cannot split my electric bill two months in a row.
I need my internet to earn money. However, I have a five day grace period on this bill. My internet company isn't likely to turn off my internet if I pay it within five days of the due date. This bill often conflicts with my rent as I am usually $20 to $30 short, and this bill is $33. However, this only works if I'm going to receive an "after rent" income deposit before the fifth of the month.
In a last ditch effort, I can borrow money from my relatives, but it has to be paid back within five to seven days of my borrowing it. If I fail to pay this money back, I lose this money-management technique.
Budgeting with an unknown income is extremely difficult. It requires budgeting minimums and planning for the worst case scenarios. In some cases, it even means borrowing small amounts of money from relatives.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
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