Tips for Balancing a Budget on a Fluctuating Income
Today’s economy has undergone several unusual shifts, and some people find themselves working steady jobs with unsteady hours. Individuals in the retail, service, and freelance industry often work a variety of fluctuating hours, and this can make balancing a budget difficult. If your paycheck is not steady but you do not want to fall behind on making ends meet, there are several financial strategies you can use to balance a budget and even save money to cover emergency expenses.
Create a Bottom-Line Budget First
Knowing the minimum amount you can survive on can help you build a healthy foundation for your new budget. Gather your monthly bills and calculate the amount you would need to cover them, plus any other necessities, such as fuel for your car and food. Since most of these costs are fixed, you can use the amount of your bottom-line budget to keep up with your expenses when times are lean.
Revise Your Priorities
Whether you want to put more money toward your credit card payments or put money away for a future vacation, having fluctuating pay means you may have to take a hard look at your spending priorities. Start by looking at where most of your money goes once your bills are paid. Do you treat yourself often with lunches out or trips to your favorite store and usually end up spending more than you intended? If so, taking steps to work on your current spending habits can go a long way in helping you create a viable budget when your pay is not steady.
Build Savings During Times of Plenty
When work is plentiful and you find yourself making more money than usual, there is no better time to open or build up your savings account. Not only can a savings account gain interest over time when you find a bank that offers the best interest rates, it can also offer you protection against lean times when money is coming in slowly. While you may not be able to put away the same amount away each month, making an effort to put at least ten percent of your pay, after bills, can grow your account quickly.
Note Patterns in Your Work Load
Detecting patterns in your work schedule can help you plan for changes in your budget. For example, if you work retail, summers and the Christmas season are likely to be busier than the early winter months, when people are typically spending less as they catch up on their holiday debt. Knowing when your hours may be bumped down can prevent unexpected gaps in your budget that might cause you to fall behind in your bills.
Be a Discount Detective
You may be able to cover your monthly bills with greater ease if you search for discounts in the services you use. For example, if you live Iowa’s capital, you can reach out to your Des Moines insurance agent and ask whether bundling or safe driver discounts are available to you. Lowering your premiums or deductible can allow you to be more flexible with your budget or provide you with additional funds to add to your savings.
Budgeting can be daunting when you have a fluctuating paycheck. However, with a little effort and a change in spending habits, you can create an effective budget and gain financial peace of mind.