Variable Income Won't Stop My Dreams

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Considering pursuing the career of your dreams, but afraid of not having that guaranteed paycheck?  Don't let the thought or fear of living on a variable income keep you from pursuing a career that you are passionate about or following your dreams.  Do take some time out to review your finances and create a plan for building a safety net to eliminate the stress of the unknown.

Here are a few ideas to rock your finances on a variable income.

Know how much money you will need to earn each month to cover all of your expense.

Create a list of all of your expenses.  Write down your fixed expenses (expenses you incur every month, but do not control the amount of the bill), variable expenses (expenses that you can control how much you spend each month), periodic expenses (expenses that you have to pay every three months, once a year, etc., and your savings.  Prioritize these expenses from high priority to low priority.  

Total up all of the expenses.  What is the bare minimum you would need to make each month to cover all of your expenses?  Are your total monthly expenses greater than your total monthly income?  If so, identify which expenses you can eliminate or reduce.  

As you know, if your monthly expenses exceed your income you will either not be able to pay all of your bills, deplete your savings, or incur debt.  During these lower income months, you will want to pay your higher priority expenses first.  Create a new budget by planning to spend no more than the amount of money you expect to earn in your lowest-paid month.

With the zero-sum budgeting technique, you should plan out every dollar that you earn.  As you go through this process, you will begin to notice any unnecessary spending that has been taking place.

Download these budget worksheets or use an app like You Need A Budget.

Build or continue to build your safety net.

You may earn less in some months than in others.  Get in the habit of saving a fixed dollar amount or percentage of your income each time you get paid.  You want to get to a place where you are living off or the prior month's income.  For example, in July, you will spend the money that you made in June.  Make it your goal to save up enough money to live off of your last month's income.  Keep this money in a separate account from your normal savings.  At the beginning of each month, transfer the amount of your monthly bills into your checking account (or whatever account you use to pay your bills from).

Come up with a plan to save money, even if it's only a small percentage each month.

Maybe you already have several months worth of expenses saved, but if not continue to build this safety net over time until you have socked away enough to cover an entire month worth of expenses.

Increase your earnings

Now, let's deal with the real issue.  Devise a plan to earn more income.  If you're like me, you may want to focus your time on the money making activities that you enjoy most or make the most money, but if you need to increase your income you may need to consider choosing a side-hustle.  Here is a list of ways you can make money from the comfort of your own home. 

You got this.  Just continue to work on your plan.  If your current plan is not working, revise it and continue moving forward.  Always forward.  Never backward.