Can we discuss income fluctuations and budgeting?

[greenluv]

Our income can vary from week to week. I know there are other people here who work for themselves or whatever and have a similar situation. I was hoping we could share how we manage to budget.

Anyone interested??

[MonkeyPrincess]

We are in that situation, too. DH can bring home as little as 400, or more than 1000, a week. So its a huge variation...

We were fortunate enough to have been able to have the months money in advance. Like his pay in June, will be used in July. We'll hold onto July's money for Aug...etc.

Curious how others do it.

[Pancakes]

DH's income varies between 4-20k monthly. Big swing. Here's what I do.

I always keep a 5k buffer in checking. This will float me a month if need be. I have all of my bills paid for the following month. DH gets paid once per month somewhere between the 5th and the 10th. That money goes to the next month's payments. For example, when he gets his June 5th check, I'll pay July's mortgage that is due July 1st. Same with the cars and everything else that is that type of payment. I will always pay a bill the day I receive it if it's something like a CC or utility. I never have a bill paying day beyond his pay date, they just get paid as they come in.

On the really good months, a couple of bills get paid twice. For example, on June 4th, before the payday, whatever is in my account over the 5k gets dumped into debt. Keep in mind that I NEVER pay the minimum payment on anything. So if I have a CC with a 15 minimum payment, I'll pay 100 dollars when I get the bill. But on June 4 if I have 10k in checking, 5k gets sent to the CC (or whatever bill needs that amount) Make sense?

Now, compared to our expenses we have a lot of expendable income. But with that we also have TONS of debt because of the house remodel. I don't usually budget gas/food/whatever money, but still am typically able to dump money to debt. This may not work for people that have a narrower margin for error.


What I did when DH was still paid this way and we made just what we needed. I stockpiled the crap out of everything on the good months. The winter was always the lean months, but it was easy because during the summer I stockpiled. I spent very little on groceries and nothing on cleaning supplies and staples during the winter. We also lived in an area where we had to read our own electric meter. I'd lie and read it high so that I paid extra. (I was probably the only person on the planet that lied to pay more) This way in the winter, my bills were quite small. But the stockpiling was what saved our butts. Well, that and my mother on a couple of occasions.

[1growingsprout]

DH base pay stays the same but his bonus/commission is diff. every month. I have fixed bills that get paid when DH gets paid (Every other thursday)
My system is very similiar to "Pancakes" system. We have very little debt so anythign extra gets tossed to SAVINGS, then once savings is over 10k we dump it to investments and keep savings at 5k. 5k can float us 2 mos if we are very very careful.

We also are on the budget plan for electric so the bill is the same monthly. Meaning we overpay in the winter and underpay in the summer. Somewhere around feb/march we balance out for the year and either get a credit or extra amt due based on useage. At that time our new monthly rate is also figured based on the past years numbers.

[my2girlz]

Another base pay plus commission over here. Commission checks come 1x a month around the 15th. We live on the base pay and all of the commission check go towards debt repayment. It can vary by thousands of dollars each month. I have a love/hate relationship with it.

[Tradd]

Originally Posted by greenluv

Our income can vary from week to week. I know there are other people here who work for themselves or whatever and have a similar situation. I was hoping we could share how we manage to budget.

Anyone interested??

Dave Ramsey suggests you do a simple prioritization of bills. List what needs to be paid, most important to least important. So, at the top, mortgage/rent, utilities, food, transportation (car payment, gas), insurance, must have medications. You get the idea. At the bottom of the list: credit cards. You eat and take care of your shelter and basic transportation before anything else.

[shayinme]

Originally Posted by Tradd

Dave Ramsey suggests you do a simple prioritization of bills. List what needs to be paid, most important to least important. So, at the top, mortgage/rent, utilities, food, transportation (car payment, gas), insurance, must have medications. You get the idea. At the bottom of the list: credit cards. You eat and take care of your shelter and basic transportation before anything else.

Both dh & I are self employed and this is pretty much what we do. I have what I call must pay bills and then there is everything else. So to some degree I have 2 budgets since we always know a base amount we can expect so that covers the true basics and then we have extra it goes to the more expendable items.

Shay

[Norasmomma]

This is us, my DH makes a variable income, many times. In the summer he can be really busy with his electrical projects and then in the middle of winter things can be a little bleak, so that is why I have been doing major stock up and ma trying to get a few thousand dollar safety net set up. We have always lived like this, right now our income is fairly good, so I am tucking money away . We are trying to get a pellet stove, but DH's father owns the store where we'll get it so that will be for cost, but it will help us save $$ in the winter. I am trying to just make things run smoother. Also I have a couple of bills that will be gone very soon, so that will be nice, although I think that I may try to take that $$ and pay it toward my CC, but it's not a requirement, so if things are bad at least we'll have a little extra funds per month.

[natural_momma]

We've been using "You Need a Budget" for a while now. DH's income fluctuates greatly as well and it really helps us plan ahead for eventual expenses so we're not caught with high bills in a low month.

[OceansEve]

DH has stable income, mine varies. His check covers all bills (not CC), the $ that is left goes toward food, gas, animals, dr visits, anything and everything pretty much.

My checks go entirely toward paying down our debt. If I am worried that my check for the following month will be low I sometimes hold onto a little from the previous check to make sure I have enough to at least cover the min payments. We have no safety net though. We have one CC with no balance, if something were to go wrong, like I lose my job, we would have to start racking up a balance with them for food and gas so that DH's check could cover the CC minpay. But we are averaging paying off 10K in CC debt every 6 months now, so this new system is really working for us.

Also I pay bills the moment i am able to. I keep track of when all my bills cycle so I can pay them immediately, no waiting till the last minute and suddenly not having enough to pay it. We are paid ahead one month on our mtg too, so that gives us wiggle room if need be. We have had to use it once, then replenished it when we had the funds.