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2003 by Mark Carney,
First American Debt Consolidation and Loans
A common challenge that many people face
while attempting to establish a budget is income fluctuation. This
occurs when an individual. s income varies greatly from month to
month. Irregular incomes are very common for the self
employed and for people with occupations such as sales, and construction. This presents
a unique challenge in creating a budget that can be adhered to
each and every month. Many people fall into the trap of
spending excess money on the good months and then resorting to credit
on the slow months. The problem with this method is that often times the credit is
not paid off when the funds are available. Each down month results in
a higher accumulation of debt as individuals fall into a vicious financial
cycle. However, it does not have to be this way. There is an
effective method for people with irregular incomes to create a budget.
Budgeting Tips For Irregular Incomes
- Write down a list of all of your annual expenses. These would
include monthly expenses as well as those that might occur at odd
intervals. Make sure to allocate money for "non bill" items such
as Christmas gifts, vacations and savings.
- Divide the total amount of expenses by 12. This will give you
a pretty good idea of how much money you will need on a monthly
basis.
- Save surplus money. On months where you make more than the
needed amount you may be tempted to spend the difference. Resist
that temptation and place the extra funds in a safe place. (a
savings account or an envelope)
- Use surplus on slow months. When you encounter a month where
the incoming funds are less than the budgeted expenses you can
utilize the surplus money fund.
- Cut expenses if necessary. If it becomes obvious that the
annual expenses are going to exceed the annual income then it
becomes necessary to trim your expenses.
By following these simple procedures an individual can create a
simple workable budget. The next challenge is disciplining yourself
to stick to your newly created financial plan. Consistently doing so
can bring about amazing results, such as, lowered debts, less
stress, and financial freedom.
~~~~~~~~~ About the author:
Mark Carney is a professional consultant with
First American Debt Consolidation and Loans, a debt consolidation
service specializing in financial education,
credit counseling, and debt management services
nationwide. |