There are many careers such as sales that pay a great salary
over the course of a year. The problem is that even with the
great yearly income, monthly upswings and downswings in income
are a financial nightmare. There are several things you can do
when you have a unpredictable income:
1. Build up an emergency fund. We’ve all heard
about building an emergency fund of at least 6 months. You may
have to build one that is even larger if your income takes giant
swings in just a few months. Most wedding photographers earn
about 75% of their income from May to August. Stockpiling that
income so you can eek out a little every month is a great way to
start.
2. Meet future financial obligations head-on. If
you know that your car will need to be replaced soon or that
your home furnace is dying, put yourself into a position where
you can replace them on your terms. Don’t put yourself in the
position of having several things fall apart at once. Spending
your money on the large, important items when you have a large
influx of money can really help you down the road.
3. Pay down your debt. The biggest problem with an
unpredictable income is the fact that you have bills that are
constantly a drain. Paying your debts off during income upswings
will help stabilize your financial situation, and over the long
hall will save you a lot of money.
4. Create a realistic budget. A lot of times when
people create a budget, they will skimp it down to only what
they "need" throughout a year. Often they leave out emergencies
and unexpected expenses that always hit a families finance. One
option would be to look at all of the expenses that you've come
across over the previous 12 months. Looking over the past year
will set you on the right course of what you can expect for the
year. You will also want to increase that budget for inflation
and rising fuel prices.
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