When earnings are uneven.
WHAT MAKES IT DIFFICULT
Costs are regular and income is not.
WHAT TO ESTABLISH
Your minimum monthly requirement Your average monthly income, over a year The range between good and bad months
WHY OVER A YEAR
Shorter periods mislead in both directions.
WHAT TO DO
Pay yourself a steady amount, below your average.
WHY BELOW
It leaves a buffer for poor months.
WHERE THE DIFFERENCE GOES
A reserve account.
WHAT THAT ACHIEVES
A regular personal income from an irregular business one.
WHAT TO SET ASIDE FROM EVERY PAYMENT RECEIVED
Tax Reserve contribution Business costs
WHAT REMAINS
What is actually available.
WHY THAT ORDER MATTERS
Spending first and reserving what remains produces no reserve.
WHAT TO AVOID
Committing to fixed personal costs based on good months Treating a large payment as a windfall
WHAT A LARGE PAYMENT USUALLY IS
Several months of income arriving at once.
WHAT TO TRACK
Income and costs monthly, against the average.
WHY
Variable income conceals trends until they are severe.
WHAT TO REVIEW ANNUALLY
Whether your drawings are sustainable.
WHAT TO DO IN A SUSTAINED DOWNTURN
Reduce personal costs early rather than exhausting reserves first.
WHY EARLY
Options narrow as reserves fall.
