29 Jun 2018 | Written by Daniel Dewitt
Budgeting comes easy when you have a regular full-time job to depend on. Working a steady 40-hour-a-week schedule allows you to know exactly how much you’re bringing home each month without fail, making budgeting easy. Now, if you’re like most Americans, budgeting doesn’t come that easy, because you may only have a part-time role at your job with an irregular income to boot. A shaky income can make the task of budgeting a living nightmare, but it doesn’t have to be that way.
It’s important to remember that regardless your income or cash flow, the whole reason for creating a budget in the first place is so you can take control over where your money goes each month. It’s actually as simple as that. Budgeting is about making every dollar count, especially when you have a limited income. Without having a budget in place, your finances can easily spiral out of control.
While installment loans could offer you fast financial relief if you’re facing a cash shortage, it’s fairly easy to avoid these types of situations altogether. If you’re not sure how to make the most of your part-time income, here’s 4 easy budgeting tips that can help you organize your finances so every bill gets paid on time, every time.
How much of your income is going toward bills? Not just your fixed bills (the ones that you pay every month that never change like rent or insurance), but all of your monthly expenses. This would include expenditures that may vary from month to month, like groceries, gas, entertainment, etc. Once you’ve added up your total monthly bills, it’s time to prioritize them.
Figure out which expenses are absolutely essential and which ones you could live without. For example, if you are considering taking your partner out for a Valentine’s Day meal at a restaurant or staying in and making dinner together, you will need to weigh the options and determine if there is room in your budget.
Though your part-time income may fluctuate from month to month, it is important to determine the minimum amount you can depend on bringing home each week based on your yearly income. In the world of finance, this would be referred to as your “base-line income.” To calculate what your baseline is, you can divide your total yearly income by 52 or look at your paycheck stubs to determine your monthly baseline income. This will give you a general idea of what you can approximately spend on a month-to-month basis.
Once you’ve figured out what your baseline income is, it’s time to put together a budget. Normally, a single budget is a great way to start, but it’s even better to create a two-budget system if you can; one that’s reserved for higher income periods and another that’s reserved for those times of the year when you’re not earning as much. The latter will be your “lean budget.” It’s a budget that puts a cap on spending once you’ve reached your baseline income amount based on last year’s earnings, and there’s no more spending allowed once you’ve reached this cap.
For the times when you’re making more, the same rule applies, except now you have the opportunity to spend a little extra if necessary. It’s always a good idea to have an emergency fund in place for unexpected expenses, so sock extra money away whenever possible. Spend only on things you absolutely need, like your fixed bills, food, gas, etc. If you’re current income doesn’t leave you room to save, you may want to consider picking up extra hours at work or finding an additional source of income.
If a part-time job is all you have going on right now, you should have room in your day to pick up something on the side to help supplement your budget. Your restrictive part-time income doesn’t have to stay that way - you’re in control of the situation. If you don’t want to work two jobs, try talking to your boss about a raise or getting more hours on your schedule. If you’ve been with the company for a while, your boss may consider giving you what you ask for. There’s no harming in asking, because if you don’t ask, you will never get what you need.
Give these steps a try and see where your budget takes you over the next year. Even with just a part-time job to rely on, you might be surprised to find you don’t need help from signature loans as much as you did before. Budgeting is about making the most of your finances by controlling where your money goes. Make this principle a habit and you may find yourself closer to financial freedom than you thought possible.