Seasonal, unpredictable income, hard to budget: what to do? - Mothering Forums

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Old 06-04-2014, 05:16 PM - Thread Starter
 
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Seasonal, unpredictable income, hard to budget: what to do?

What do you do?

Are you or your dp dependent on seasonal income? Income that varies from year to year? Self-employed? Any arrangement that makes it impossible to predict income even from month to month?

Do you have trouble budgeting? Knowing in the moment whether you have enough to get through the "slow season"?

I am having a very difficult time wrapping my head around budgeting for our family. DH is a gardener, so our gas bill varies by several hundred every month. It's hard to budget for truck and car repairs, hard to know how much to put aside.

We've had the luck of making money on a house sale at the height of the market and an inheritance, but those are gone. I'm working a little more myself (self-employed as well), but we never know how the year will play out financially.

And with health care, I never know from year to year whether I will have to pay or not or how much. Our income can *vary* as much as 10K, 15K or more, though that's worst case (very recent worst case, which is why it's fresh in my mind).

I love doing what we do. I love being self-employed. But I don't really know where to start short of not buying anything for a year.

Anyone been through this and figure out how to manage?

ETA: Our down season is November through March. Expenses can exceed income as early as October and as late as April. We have 2 birthdays, Christmas, and property taxes due all in that time. Otherwise, we'd love to not spend during that time!

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Old 06-05-2014, 03:02 AM
 
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We're in a similar situation; DH is a self employed landscaper with a working season of Mar or April (depending on weather) to Oct, and I work part time (about 21 hours a week) at night.

Our usual plan is based on symbiotic relationships with several self employed friends whose work doesn't totally tank in the winter-masonry, fish pond design, auto detailing, snow removal (when it snows here-unpredictable)....DH pays them for help during his rush season, they pay him during theirs. If that isn't enough then I pick up more hours at my job. I work in a retail warehouse so usually there are more hours for the taking before the holidays at least. The back up plan for that is him picking up private duty patients- he was a nurse in his previous life. That would be last resort, though, as he does too much of that between my Mom and his Grandmom as it is!

Having said all that...the last two years have been tight enough that we ended up in debt by Jan. and spent the beginning of spring catching up, so I obviously need a better method of keeping a safety net under us! Most of it was a perfect storm of big medical bills (no health ins for him until this yr), a crappy economy that eliminated a lot of winter income and increased gas prices, and the simple fact that all his equipment is ancient and breaking as fast as we can fix it! Still, though, we should have a more concrete plan this year besides my current "squeeze every dollar until it screams but still freak out every time an unexpected bill shows up" method.

Eeesh, perhaps I should be asking for help instead of trying to give it, huh? Maybe we could brainstorm together.
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Old 06-05-2014, 09:28 AM - Thread Starter
 
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Still, though, we should have a more concrete plan this year besides my current "squeeze every dollar until it screams but still freak out every time an unexpected bill shows up" method.
Sooo, this doesn't work?

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Old 06-05-2014, 09:35 AM - Thread Starter
 
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Eeesh, perhaps I should be asking for help instead of trying to give it, huh? Maybe we could brainstorm together.
The two things I've thought of is

1. Don't spend any money for 1 year and see how we do. Yeah... nope.

2. Reevaluate our income at the halfway point, when dh does his quarterly taxes. That should be slightly less than half our income (Jan-Mar is the worst quarter), and we need to reassess for our health insurance anyhow. Then add up all our bills as best we can. We can average our gas card and electric bills. Then we'll see for the food budget and whatever is left for extras, if any. That's our (ha ha HAHAHA :snort!) budget.

ETA: I've tried looking for seasonal work with no luck last year. But I did get 2 new clients and an old client is back part time, so that's better. I will start looking earlier this year.

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Old 06-06-2014, 06:57 PM
 
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My husband and I are musicians with a season that runs Oct-May. We make a predictable amount from our orchestra, but then there's a long summer of teaching, random gigs, and dipping into the line of credit.

I try to average out our last three years of income and then "budget" expecting that for the year. Then average that out for a month. So if you make an average of 30k a year, say, that gives you $2500 per month. Then, if you have a really good month and make like 8k, don't spend it all! Remember that you really only made $2500 for that month... the rest is for other months.

This is not always possible and sometimes I do better at this than other times.
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Old 06-06-2014, 08:49 PM - Thread Starter
 
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I really like that idea.

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Old 06-07-2014, 09:47 AM - Thread Starter
 
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I was thinking about this last night and I realized that I really don't know what we are bringing in from month to month. This time of year especially it would take some work (until dh does his quarterly taxes) to separate business expenses from income. DH has purchased nursery plants that might not be planted for another few weeks. He collects sales tax, which is paid back quarterly (we don't owe any other state taxes at this level of income). And even if we were good about it, there are business write-offs that aren't as straight forward until we sit down to do taxes (truck expenses, primarily). I have no excuse for my portion of it, but I have an idea of what I'm making and it's not much.

One obvious solution is to get dh a separate credit card for his business. That would prevent me from having to separate expenses on the bill by hand, which I do about every 3 months. He has resisted this in the past.

Second is to get some accounting software. That ends up falling to me, though and he has resisted this, too, and we haven't really had the need for it in the past, now I think we do.

Second quarter is looming. We'll know how we are doing for the first half of the year and I'll try to work on getting an average figure and figure our bills.

Geez Louise, between my laziness and his stubbornness, it's no wonder our budgeting is nonexistent!

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Old 06-07-2014, 11:57 PM
 
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Dh read my reply and pointed out that it did work well for the 10 previous years, so I should give us a little credit. He's right, we also had the added issues of my Mom and his Grandmom needing a lot more care lately, which cuts into our work time and would even if he wasn't self employed.

One other thing I do is set it up so that major bills get paid during busy season- home and auto ins, property taxes, meat for the freezer, wood for the stove if we must buy it (rarely) pay for kids lessons and activities (also gets me a discount!), major house repairs, etc. We also start our homeschool year in spring partly to be able to buy books & supplies during a "rich" month. I know it doesn't make sense financially to pay property taxes early because that money could be earning interest, but it's such a load off my mind to have them paid that it's worth it to me.

Also, and this is more a general frugality thing, we try our best to barter or trade if at all possible. It might depend on local culture but we've always had great luck with it.
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Old 06-17-2014, 05:35 AM
 
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I'm not totally facing it yet, as I'm not making enough money to so I'm just in a permanent state of "crap we don't have money", but the biggest advice I've heard is to try and have big enough savings that you can use it as a buffer in low times and add more to it in good times. I know, real easy, right?

I agree that he should get a separate credit card/account for business expenses. Apparently there are a few credit cards specifically designed for businesses, you may want to look into those and see if they're worth it. At least separate receipts (if I'm buying some business-related things and some others from the same store- I do two transactions) into one place. How do you handle taxes if you can't keep track of business expenses well? (serious question, I'm freaking out about taxes next year)
I've been using a spreadsheet to keep track of expenses vs income. You can get open office for free. It's not as good as proper accounting software, but it's free.

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Old 06-17-2014, 07:34 AM - Thread Starter
 
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At least separate receipts (if I'm buying some business-related things and some others from the same store- I do two transactions) into one place. How do you handle taxes if you can't keep track of business expenses well? (serious question, I'm freaking out about taxes next year)
We do keep track of business expenses, or more properly, dh does, very meticulously. It's only the Visa bill that's mixed up so I have to go through and cross those off when I want to know what we've really spent. I'm pretty good at identifying those, but it's a pain in the rear. Still, we don't know exactly how much we've brought it until quarterly taxes are due to the state (those keep us on the ball.) Though we have an idea about how we are doing based off how easy it was to pay the Visa without dipping into savings.

I have our girl scout troop finances to wrap up and some minor work details, then I'm going to dive into our finances. 2nd quarter earnings should be tallied here soon. I should do mine as well, though I don't need to do quarterly taxes.

Not sure precisely what "handling taxes" entails. If you mean "what we owe to the IRS" we haven't had to pay taxes since the girls were born, as the EEC has always given us a hefty return, even after figuring in self-employment tax and all that.

So, I can't answer to that question. You have an idea based on last year's taxes. That was always good enough for us.

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