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Irregular Income

budgeting Sep 01, 2017

I don't make hourly or a salary, I make commission...
I have irregular income, so I cannot make a budget

Irregular Income (income changing week to week) is a normal issue for anyone making commission, it affects both 1099 Independent Contractors or W-2 Employees.  One week you may make $300, another week $700 and yet another week $1300 or more.  Most groomers know the Holiday Season is a bountiful time when we will make the most money all year.  Some groomers will actually double if not triple their income in the months of November and December.  

Guess what? That 'extra money' needs a plan so it can be squirreled away for January and February.  With the chance of some groomers seeing snow, extra rainy days, etc) they may see a drop in those months.

OK, That's great but how Do I budget for irregular Income?

Go back the last 3, 6 or 12 months worth of income depending on your employment and your patience to add numbers up.  Add your AFTER TAX income together, divide by however many months you have been at that job.  

$4000 July + $3000 + August +$2000 September = $9000
$9000 divided by 3 months = $3000.  
This groomers "median income" is $3000/month

For those with a very volatile income go by the LOWEST month, it'll help you really look at priorities and budget a higher emergency fund.

Keep your business and your personal finances separate... your business is not your personal piggy bank! 

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