Step 1:
Use a realistic estimate for your basic guaranteed take home for the month, try to be conservative. For instance: if you have earned £1050.00 in May, £900.00 in June and £1000.00 in July, consider your bottom line to be £900. Try to save anything over the bottom line, so that you can use it when needed.
Step 2:
Write down what you can't live without. Be realistic about this. Rent, mortgage, utility bills, council tax, food - these are your priorities.
Step 3:
Add the runners-up to that list of essentials. You should have two lists--things you need to be paying each month and things you would like each month. Budget your income to cover the "can't live without" list. In other words, does your bare bones monthly income cover the roof over your head and nutritional requirements? If you have money left over, feel free to splurge on that DVD/magazine/take away you want (or maybe consider a savings account).
Step 4:
Avoid debt. Money borrowed is hard to pay back on an up-and-down income. Don't spend the money if you don't have it. Easier said than done? Maybe - maybe not. If you are consistently spending more than you bring in, go back to Step 1 and start over. It is possible that your budget is not covering your bare essentials? Or that your bare essentials are not so bare!? Keep a check on “cash spending”, how many times do you visit the cash point? And what are you actually spending that cash on?
Step 5:
Try to save for emergencies. You can’t plan for everything, but you can try to be prepared. Again, easier said than done, but consider this. Put a set amount of money in your "can't live without" budget, and you should find that you treat that money with the same importance as you do the rent and groceries. Having an emergency fund is a good feeling; make sure you get an account that pays you a good rate of interest on your savings.
Step 6:
Supplement your income with something steady. An amount as small as £20 or £50 a week can be a big weight off your irregular income shoulders. Creating a budget with no real idea of what you will bring home is very difficult. A small supplemental income will give you a steady cornerstone for your unsteady month ahead. Always remember to budget for income tax and/or national insurance contributions on a second income if applicable.
Step 7:
If your income is variable because you are self employed, take a good look at your business and decide if it is a realistic way of earning money. If you are doing something that you always dreamed about, but it’s not making you enough money to live on, you may have to change your plans and consider a salaried job. If you are salaried but have to rely on commission, consider applying for other jobs where the income is fixed. Commission is great if you have a high sales month, but on a bad month you are at risk of missing priority payments, or getting in debt to make ends meet.
Use a realistic estimate for your basic guaranteed take home for the month, try to be conservative. For instance: if you have earned £1050.00 in May, £900.00 in June and £1000.00 in July, consider your bottom line to be £900. Try to save anything over the bottom line, so that you can use it when needed.
Step 2:
Write down what you can't live without. Be realistic about this. Rent, mortgage, utility bills, council tax, food - these are your priorities.
Step 3:
Add the runners-up to that list of essentials. You should have two lists--things you need to be paying each month and things you would like each month. Budget your income to cover the "can't live without" list. In other words, does your bare bones monthly income cover the roof over your head and nutritional requirements? If you have money left over, feel free to splurge on that DVD/magazine/take away you want (or maybe consider a savings account).
Step 4:
Avoid debt. Money borrowed is hard to pay back on an up-and-down income. Don't spend the money if you don't have it. Easier said than done? Maybe - maybe not. If you are consistently spending more than you bring in, go back to Step 1 and start over. It is possible that your budget is not covering your bare essentials? Or that your bare essentials are not so bare!? Keep a check on “cash spending”, how many times do you visit the cash point? And what are you actually spending that cash on?
Step 5:
Try to save for emergencies. You can’t plan for everything, but you can try to be prepared. Again, easier said than done, but consider this. Put a set amount of money in your "can't live without" budget, and you should find that you treat that money with the same importance as you do the rent and groceries. Having an emergency fund is a good feeling; make sure you get an account that pays you a good rate of interest on your savings.
Step 6:
Supplement your income with something steady. An amount as small as £20 or £50 a week can be a big weight off your irregular income shoulders. Creating a budget with no real idea of what you will bring home is very difficult. A small supplemental income will give you a steady cornerstone for your unsteady month ahead. Always remember to budget for income tax and/or national insurance contributions on a second income if applicable.
Step 7:
If your income is variable because you are self employed, take a good look at your business and decide if it is a realistic way of earning money. If you are doing something that you always dreamed about, but it’s not making you enough money to live on, you may have to change your plans and consider a salaried job. If you are salaried but have to rely on commission, consider applying for other jobs where the income is fixed. Commission is great if you have a high sales month, but on a bad month you are at risk of missing priority payments, or getting in debt to make ends meet.
No comments:
Post a Comment