At different times throughout our life, my husband has had a
fluctuating income. He has worked in the
construction industry and in sales with commission only income. I know it can be difficult to budget and plan
each month, when each month your income changes and sometimes drastically. We have had times when my husband made $7,000
in one month and then only $2,000 in another month.
What has worked for us is we established our base
budget. What does it actually cost to
operate your household each month? Then
when we had busy months with overtime hours, and extra commission checks, we
would save anything that was over our base budget. I find it helps to save in a savings account
that you do not look at often, so you are not tempted to use the money you are
saving.
It is easy to get excited when you sell a big job and
receive a large commission check. It
sounds like fun to go shopping, or eat out and party with that extra
money. If you will save and plan for
months ahead when income is a little tighter, you will reap the benefits of greater balance in your finances and life.
As you get a handle on your budget, you will also be able to
have some fun with overtime checks and commission checks. I find if you will come up with the amount
you need to save for those slower months and save that money, then you will
also be able to purchase that larger item, or go on that trip you have wanted
to go on. There is room for both, so
it’s not only about saving and not living.
Growing up my father was in the construction industry so I
was familiar with the up and down income flow due to the seasons. In the construction industry, the summer
season is typically a busy season, with lots of work which provides an increase
in finances. Then comes the winter rainy
season, where many times you don’t work for days and even weeks, which brings
on a decrease in income flow. My husband
and I would budget and plan for the winter months which enabled us to live
comfortable without the stress and pressure of wondering how we would pay our
bills when he wasn’t working in the winter.
One year we had budgeted for the winter months and paid ahead
on all our bills. We planned a 15-day
cruise to Hawaii during the winter months when we figured we would not be
working much anyways. It turned out
perfect, not only were all our bills paid, our cruise was paid for and we were
away during a time we weren’t working anyways, we did not have to return home incurring debt.
You can also look at what is your average income over a
year, what did you make last year divided by 12 months. Then plan each month accordingly, this will
give you consistency, even when you feel you don’t have consistency in your
income. Knowing the average per month
you have to work with, will enable you to set boundaries so you do not find
yourself in trouble when you have a great month and spend all that money.
I know fluctuating income is not only in the construction
industry, but in a lot of sales positions.
You can have a great month where you sell a lot and then some just
average months, it is better if you will plan for times of increase and use
that increase wisely.
This will also help your spouse. I know as the one who does the budget and the
planner of the two of us. It is not fun
to budget when you do not know what you will have to work with. When you have a set monthly budget and plan
accordingly it makes budgeting more attainable even with a fluctuating
income.
If you have a fluctuating income commit now to work within
your monthly average, save anything extra that comes in for those tighter
months. You will see greater peace of
mind, less stress, and greater unity in your marriage. Planning for those tighter months will help
you not go deeper into debt in those slower months, or for Christmas when it is
raining and you might have less work. I know if you are already in your slower months and have not planned properly it can seem easier said than done. I have been there, everyone has to start somewhere. If you are in that situation I recommend you look over your expenses and cut anything you can, negotiate on your plans and services to get the best bang for your buck and then when you do have a great month, live within your set budget and save the extra, or use the extra to pay ahead on bills, or pay off debt. The idea is to purpose to find your average monthly income and to live within a budget. It is in changing your habits of spending, shopping, and eating out that you will have a better handle on your finances.
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