When earnings vary.
WHO THIS AFFECTS
Traders and self-employed people Commission earners Seasonal workers Anyone paid irregularly
WHY IT IS HARDER
Costs are regular and income is not.
WHAT TO ESTABLISH
Your minimum monthly income, from records.
WHAT TO BUDGET ON
That figure, not the average or the good months.
WHY
Budgeting on good months produces deficits in poor ones.
WHAT TO DO WITH INCOME ABOVE THAT
Set it aside, deliberately.
WHAT FOR
Covering the poor months Building reserves Irregular expenses
WHY IT MATTERS
Good months are what fund the bad ones, and they are usually spent.
WHAT TO ESTABLISH
A regular amount you pay yourself.
WHY
It smooths consumption and it makes budgeting possible.
WHAT TO KEEP SEPARATE
Business money from personal money, where applicable.
WHY
Mixed accounts make it impossible to know what you actually earned.
WHAT TO ESTABLISH
Separate accounts.
WHAT TO BUILD FIRST
A larger emergency fund than someone with stable income needs.
WHY
The likelihood of a gap is higher.
WHAT TO TRACK
Income by month, over time.
WHAT THAT REVEALS
The pattern, including predictable poor periods.
WHAT TO PLAN FOR
Those periods, in advance.
WHAT TO AVOID
Fixed commitments based on good months Debt repayments that assume peak income
WHY
They become unmanageable in the poor periods.
