It would seem the beauty of the set paycheck would outweigh the irregular one every time. But there may be some awesomeness you might be missing.
With an irregular income you must prioritize your budget.
Go ahead and work up an ideal budget that has plenty of room for healthy saving, investing, and paying down debt super quick. Make sure you have your sinking fund deposit included to cover those annual expenses that you always seem to forget about. (You know your kids $250 birthday party, swim lessons, and the car registrations that happen every year.)
But then create a base budget with things listed in order of priority. Mortgage or Rent, Utilities, Fuel, Food. (But can those last two be lowered from ideal if income falls?)
Here’s where the beauty falls in love with the beast.
Seeing your ideal budget motivates you to bring the hustle. You don’t not want to fund that new car goal with the June deadline. You don’t want to not see that savings account hit the $10,000 mark. When you know you are going to come in short you start scrambling. You push. Those regular monthly predictable income paychecks don’t get to experience this burst of motivation.
Instead of dipping into savings you have the control to eliminate. Realistically everyone has the potential to do this. But those of us that have a variable income have our hands a bit more in the cash flow pot out of necessity than someone whose expenses are fairly automated. We don’t really have a choice in that.
By knowing going into the next month you are going to hit less than ideal you get to be picky. Instead of continuing my current level of funding I’m going to slash my food budget, eat in more, and make things last a bit longer. So I’m not funding the car fund, or the vacation fund, sometimes treading water’s ok. Even if it feels frustrating.
You have the power to smash your financial goals. Don’t fall into the camp of saving extra for next month. Make that lady stand in her very own stilettos. (“But…..” Nothing. Don’t make me revisit Beauty 2. Next month’s a big girl. She can take it.)
This funny thing happens when you have extra…..It disappears. Oh yeah you might actually save some for next month. But do you find yourself losing the hustle because it’s already partially taken care of? And what if you see those new boots that you love even though you have already spent your clothing budget? It’s OK there’s “extra”.
Put down the Nordstroms card and step away from the counter. Just like you prioritize in the lean times you priorities when you’re on fire. Which financial goals are you going to knock out faster than a Real Housewife of New Jersey? It sure would be fun to be driving off the lot in that car in March instead of waiting until June. Go ahead give yourself an extra bill in your mad money stash but decide before the month even starts where you’re “extra” is going.
Trisha Funk is a financial coach and author. She blogs at FinancesWithFunk.com and lives to help others turn their lives around.