Some people don’t make as much money as they would want, and they often find themselves in need of more money. When money is limited, everything else in your life seems like it is too; Nevertheless, whatever your income might be, there are numerous strategies to manage an irregular income and make sure that you never feel limited because of it. On the contrary, when you manage your money things turn out even better than you had expected them too, and this way you feel more freedom to do certain things and avoid overspending and finding yourself in debt.
There are strategies and tips you can use in your favor in order to manage an irregular income and make sure you can spend wisely. If you are someone who is constantly limited by their income, then these are some tips you should definitely follow.
1.Plan Ahead
Knowing your baseline is extremely important. You need to know how much you are making exactly and start from there. Planning ahead means using your income and first setting out how much you need for monthly payments, rent, water, electricity, etc, and from then plan the money you have left over how you are thinking of spending it, and if there will be anything left over? Set yourself a budget for the month, and make sure you stick to it.
2. Two Budgets
Separate your regular income into two, one you are planning to spend and one you are saving. Even though you have a limited income, this doesn’t mean that you can’t save money every month. Little by little, if you put money aside, you will have enough saved up by the end of the year. The important thing is to separate the money in between the one you have planned to spend, and the one you are saving.
3. Emergency Fund
Regardless of your income, you always need to have an emergency fund, money to spend on whatever is urgently needed. Always put money aside and establish it for emergencies. You might think that you don’t need it, but you don’t want to regret it if anything were to happen, not having enough money to pay the bills and stressing out about this. Living on an irregular income doesn’t have to leave you in debt, you just need to learn how to manage it wisely.
4. Live on Last Month’s Income
Do not live day by day, this is very risky, and often companies pay you every month or every 15 days. You should always be living on last month’s income, and use it through that month. Don’t use credit cards or buy things you will pay up “later”, this is exactly how people end up in debt because they think they can pay off their expenses with that month’s salary, and what they don’t know is that often using credit cards leads you to miscalculate what you actually have to spend, and even spend more than you should.