Seattle Real Estate News

Now that you are your own boss - now what?
December 24th, 2017 11:20 AM

Freelancers, the self-employed and those who depend on tips or commissions can have a great-paying month or a bad one which leaves us vulnerable. The best advise is to plan ahead as much as possible. Here are some tips for managing money when paycheck fluctuates: 

a) Build an emergency fund. The rule of thumb is we should save nine months's worth of expenses in an emergency fund. I t's more than the standard recommendation of three to six months' worth to cover expenses in a month we don't get paid as much.  One program to help jump-start a savings habit is saverlife.org. 

b) Budget what you spend. Irregular income means that we must live below our means. Because we don't know our income for a given month, we must construct our budget around baseline/necessity spending such as housing, utilities, food, insurance and transportation and a monthly amount for annual bills such as property taxes. As app that tracts spending such as Mint or Personal Capital can help us estimate. 

c) Create a steady paycheck by setting up separate accounts for deposits and spending. Deposit paychecks into one account and pay yourself a "salary" that covers expenses. 


Posted in:Budget and tagged: Budget
Posted by Sam Kader on December 24th, 2017 11:20 AMPost a Comment

Subscribe to this blog

My Favorite Blogs:

Sites That Link to This Blog: