by Tony Balthazar

Created on: January 11, 2010

As though budgeting were not hard enough, you've made the decision to be self employed.  This compounded with a tough economy and you have discovered that your best plans of financial freedom could be thwarted by payments that are not coming in as often as you'd like.  In fact, you gave up a regular post to find out that sometimes you get income every week and other times you are only getting it once a month.  Irregular payments make it difficult but not impossible to create a budget, the more important thing is making sure that you stick to that budget. Let's look at how to budget with irregular payments.

Firstly, you must have some idea of how much you will make over the course of your year.  Once you establish this, you can determine quickly how much you can safely budget for a month and meet your financial obligations.  Base your income projections on reality and not what you hope you will earn, if you project too high, you are only going to be disappointed.

Next you must list your existing fixed expenses.  Some expenses are not at all flexible including your home loan (or rental), your insurance and other expenses that are the same from month to month. These amounts should be deducted from your payments so that you can ensure you know how much you have left.  Additional expenses such as electric and heating should be estimated and can then be deducted from your anticipated payments.

Then you should look at expenses that can be reduced. Some of these expenses such as child care can be easily mitigated if you determine that having both parents working outside the home is not cost effective.  Check and see where you can cut some of your extra expenses and if you can eliminate some of your monthly expenses you should take this opportunity to do so.

Lastly, make sure you review your budget regularly for changes that will need to be made. One of the challenges associated with budgeting when you get irregular payments is that you need to be flexible in your approach.  Review your expenses regularly and see where you can reduce them. You might be able to make little changes such as taking advantage of coupons, sales, second hand stores and more.  Don't miss a chance to find ways to curb your spending.  These easy methods can help you budget when you get irregular payments.

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