With the South African economy already so vulnerable with the volatile rand bringing about uncertainty in turnover within businesses it has left many to go at it on their own through self-employment. And budgeting is tough enough for someone working a nine-to-five job, it’s even more so if you work on contract basis or are a freelancer.
And budgeting on an irregular income much like being an entrepreneur is not for everyone. It requires a good financial head on your shoulder, which takes discipline. And a drive to make something out of nothing as there’s no guarantee of a monthly salary. Therefore how do you budget for an irregular income, here are 3 tips to get you started.
- Understand your circumstances
Having a realistic look at your life will be the first step in helping you narrow down your focus and start budgeting for an irregular income. This will help you know how much money you have to risk or whether you’re able to live off your part-time venture. As at certain stages in our lives we have different responsibilities to attend to.
- Know the actual flow of your spending
To even begin to consider budgeting you have to know what kind of a spender are you financially, maybe you tight fisted with your money or shop impulsively. By checking your bank statements regularly this can help you stay on top of your cash flow. Keep an eye on what payments have been paid, which are outstanding and determine how much you still need to bring in for the month to meet your commitments.
- Having more than one account
As this will help you to not spend all the cash flow you have at your disposal. Also having a savings account can assist in having your money grow while it sits and matures in your bank account without you using it. And it is something that you can always dip into for that emergency purchase, which you can refund on your coming pay.