Flexible expenses vs periodic registration#

More ideally, work toward building a fund that can support three to six months of living expenses. You will need to cover a minimum of four weeks expenses from this fund. This is called ‘Paying Yourself First’ and should be a priority especially in the months when more than the minimum income is received. To achieve this, put money into the fund at the same time you pay your other fixed expenses.

Flexible expenses vs periodic registration#

Set aside onetwelfth of the cost each month so that you have the funds available when you must pay the registration fee each year.Įstablishing a savings fund, especially an emergency fund, is extra-important for a person living on an irregular income.

For example, take the annual cost of your car registration divide that amount by twelve. Set aside a portion of your income each month to prepare for these expenses.

Use a calendar to map out your periodic expenditures. Car registration and maintenance are items often overlooked in this category, yet still need to be planned for. Holiday, back-to-school, and other less regular expenses such as some insurance premiums must be a part of each month’s plan even though the actual expenditure may be several months away. Periodic expenses are items that occur less frequently and may occur during certain times of the year. If there is insufficient income these items can be trimmed from your spending plan. Categories that are even more variable include things such as clothing, entertainment, and gifts that are nice to have, but the amount spent can be adjusted more easily. Other variable expenses are transportation and health care costs. Variable expenses include utilities, food, insurance, and child care. Money for a savings fund should be a fixed expense in order to build reserves for emergencies and to achieve long term goals such as education and retirement. You may have other contractual obligations such as cell phone or finance company contracts. These are obligations for which you have signed contractual agreements and must be the highest priority monthly payments. Think of your expenses in three categories: fixed, variable, and periodic.įixed expenses include such things as housing and car payments. The spending plan should include categories for savings, monthly, and periodic expenditures. Communicate with each other about individual and family financial goals and how those goals might be achieved with the income that is available. Spending plans work best when the whole family is involved in making decisions about expenditures. Finding ways to use extra income is much easier than cutting back.Ĭreate a spending and savings plan based on paying essential living expenses.

It is better to underestimate income than to overestimate. Use last year’s tax records to help estimate the amount of income to expect. When there is more than minimal income, this allows you to afford additional items that may be wanted, not just needed. Planning to use your minimum monthly income rather than average monthly income can give you a buffer of safety. Estimate your income based upon the minimum monthly amount you can count on. The following are steps to take that help you live with irregular cash flow.Ĭalculate your income. Steps to take when planning for an irregular income This helps to avoid overuse of credit and going into debt. Planning ahead, prioritizing expenses and living within your income is critical. Dealing with irregular income to pay personal living expenses requires planning and management skills. Paying living expenses with fluctuating income can be overwhelming and frustrating. People who earn income from seasonal tourism, construction, blogging, commissions, farming and some types of self-employment experience personal income that varies with the season and economic conditions. Put more money into your retirement account in the good months.Don’t make financial commitments you cannot keep. This is critical when living on irregular income. Categorize expenditures into fixed, flexible, and periodic expenses.Prioritize spending according to importance of the item.Plan expenditures around receiving minimal monthly income.By Laurel Kubin and Glenda Wentworth * (9/14)