Today's post was contributed by personal finance blogger - Trisha Funk.
Please give Trisha a warm welcome, enjoy, and please share.
Trisha Funk, is a financial coach, author, wife, and mother of four. Not always in that order. She blogs on her personal finance blog Finances With Funk. Always authentic, usually sarcastic, and immensely passionate about helping people transform their finances and their lives.
If you think an irregular income sounds like a budgeting nightmare you are not alone. But you just might be wrong.
Irregular income budgeting different? Yes!
Irregular income disadvantage? No!
People who choose to trade a standard 9-5 job for a set salary may be granted some stability in their financial process but there are some major advantages that those of us with an irregular income have that you just might be overlooking.
The ability to be paid according to the effort you are willing to put forth.
How many of your friends can choose to find their hustle because they want to go on vacation next month? Want something and commit to pay cash for it? You don’t have limits on your income. Want to push out another sale this month? Do it.
Set your ideal budget every single month. Go ahead and put in the deposit for the vacation fund to Europe, the extra debt payment you want to make, the ideal ROTH contribution, and that other saving goal. Then set your base budget. This is the budget with only the necessities. Once you list out that ideal detail, you have just made a commitment in your mind to go there. You don’t want to miss that vacation, it was important, that’s why it’s in the budget. So you’re going to show up in a huge way that your clock punching, paycheck collecting cousin is not going to do.
The ability to be acutely aware of your finances and overly protective of your emergency fund.
Those of us who live our lives on an income that is not guaranteed don’t often let money go unnoticed. Out of necessity we are more involved in the weekly or monthly budgeting and cash flow process than those whose finances are almost completely automated. When something becomes too automated it’s a lot easier to not feel emotional about it. When you stop “feeling” where your money is going you don’t keep as close of tabs on it. And it likes to run away.
We can also be hyper-protective of our emergency funds. You also have an option when an emergency does hit that a set paycheck counterpart lacks. You can choose to just cash flow your issue. Have to replace a battery on your car? I know that wasn’t part of your normal budget but rather than just pulling it out of savings or putting it on a credit card you have the option to write one more article, or close one more sale before the end of the month.
The ability to rock your financial goals.
You can set a goal to buy your new car in August but with a focused budgeting approach you know before the month starts where your “over and above” is going to go. You could just continue to put your $200 in the new car fund every single month but by directing that $300 over base budget somewhere that is going to make a difference you could be driving that car off the lot in April instead.
So it’s time to stop making excuses about how your irregular income seems to be restricting you and start looking at all the opportunities your irregular income actually is affording you. If you start looking at your glass from a different direction you just mind end up changing your financial situation in a pretty huge way.