How To Cope With Varying Incomes

Do You Deal With A Fluctuationg or Seasonal Income That Varies From Month To Month?

Many people, like salesmen or contract workers, are used to dealing with a fluctuating income. Others, because of these rough financial times, are only beginning to have to manage their finances without knowing how much money they will make over the next several months. Of course, it is much easier to plan when you can predict how much money you will make next week, next month, or next year. But many people who are used to dealing with fluctuating incomes have some great tips!

• The advice that your parents gave you about paying yourself first is especially relevant. During fat times make sure you discipline yourself to set aside cash for lean times. If you need to come up with cash to tide you over, pay for an emergency, or even loan to your cousin George, it will be good to have the assurance of having a savings account to fall back on.
• Try to keep your monthly required bills as low as possible. For instance, if you need a new car loan, it may be prudent to extend the term of the loan in order to reduce monthly payments. Sometimes 0% car financing offers will not work out if the shorter term forces higher payments. If you anticipate an income reduction, this would be a good time to cut out extras like gym memberships. Walking is geat exercise, and it is basically free!
• Try to take some practical steps to reduce monthly bills that you cannot eliminate. For instance, this may be a great time to consider transferring high credit card interest rates to lower or 0% offers.

These basic suggestions may seem like common sense, but you’d be surprised by how many people do not follow them. When big money comes in, big money goes out, and when the windfall ends, little is saved for rougher times. We may not be able to control everything, like emergencies or dropping stock markets, but we can control some very important parts of our basic finances!

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