How to Step off the Variable Income Rollercoaster and Budget Like a Boss
Variable Income + Budgeting = It doesn’t work?
Too often people think having a variable income will put a halt to budgeting. They have all of the ‘reasons’! It won’t work because the numbers change all the time. There’s no way I can make a budget work because.. To all of that BS I say NO! Of course budgeting can work with a variable income! Business owners and entrepreneurs must be flexible and smart while budgeting for a variable income. But it is doable, even EASY with the right system, and I have a system that works! Here are a few things I have worked out in my business on a variable income.
Salary - I have a CONSISTENT salary. Every 2 weeks my ‘paycheck’ is put into our personal account.
Worry Free - Even on a variable income I still enjoy the benefits of being my own boss, minus the stress of wondering how much I can pay myself each month.
Quarterly Bonuses - Not only do I pay myself bi-weekly, I pay myself quarterly bonuses too!
5th Bonus - Yes! Another bonus! This is the surplus I save for taxes. I always save a little extra for income taxes because I would rather have a bonus than panic for a payment I wasn’t prepared for.
I do all of this with a system that takes into account the UPS and DOWNS of my variable income. Higher income months I save a cushion to be used during the lower income months. If you’re starting the journey of self-employment, or already a seasoned boss, this system will work for you. Is your business product or service based? This system works for both!
Know your Numbers!!
So, to get the above system started you really do need to know your numbers. Not knowing them is a huge cause of financial stress! How are you supposed to budget on any type of income without knowing your numbers? You can’t! Avoiding them is not helping your stress level! So, it’s time to stop avoiding them and time to get a handle on your numbers. Spreadsheet or paper and pen! Grab one or the other and get to collecting the numbers you need! Here are the numbers I want you to know:
Bank account balances.
Your credit score. Credit Karma or Borrowell are 2 FREE options to find this number. I recommend you check both because chances are they are different numbers!
Your income! If you are self-employed this is where your bookkeeping becomes important! It's not fun, but it is necessary!
All of your monthly expenses. CLICK HERE for my free budget tool to organize these numbers.
ALL of your debt details:
How much each of your debts is.
Who you owe them to.
What your interest rate is.
What your minimum payments are.
When you will have the debt paid off if you pay only the minimum payments.
This may look daunting and seem like a lot of work, but I promise it won’t take as long as you think. The value of knowing these numbers is well worth your time and effort! It is going to relieve you of stress! This will also be a huge motivator for you to make some changes.
SO, if you’re looking for some accountability, or sick of the rollercoaster income causing you stress with your business and personal finances CLICK HERE to book a free 30 minute Discovery Call. Let’s chat about how I can support you and get you feeling excited about your business and finances!
Sherry
