fbpx
Potentash
  • Business
  • Entertainment
  • Fiction
  • Lifestyle
  • Travel
  • Skin + Beauty
  • Health
  • Relationships
No Result
View All Result
  • Login
Potentash
  • Business
  • Entertainment
  • Fiction
  • Lifestyle
  • Travel
  • Skin + Beauty
  • Health
  • Relationships
No Result
View All Result
  • Login
Potentash
No Result
View All Result
image from https://allegiantfp.com/budget-inconsistent-income/

image from https://allegiantfp.com/budget-inconsistent-income/

Finances: Budgeting For Variable Income (Freelancers, The Self Employed, Consultants etc)

Mumbe Mutanu by Mumbe Mutanu
October 2, 2018
in Business, Business Finance, Business Tips, Careers, Entrepreneurship, Lifestyle, Running a Business
Reading Time: 4 mins read
24 0
1
29
SHARES
162
VIEWS
FacebookTwitterWhatsApp

Budgeting is a crucial step in successful financial planning. It is simpler when one is employed and they, therefore, have a clear idea of what they will make by month end. However, freelancers, the self-employed and those that live off commissions do not share in the luxury of certainty of income as theirs will vary from period to period.

With the growing uptake of non-traditional jobs in all sectors, payment procedures are different and currently, for most freelancers, the uncertainty is not solely on the amount they will make that particular month but also when they will get paid.  Opinion: The Deception Of The Gig Economy

Calculate your baseline

Being aware of what your essential bills are e.g food, rent, clothing is a starting point that is completely necessary for your planning. Having this information will also help you in planning on what type of jobs to take up especially those that have a safety net and certainty of payment. This will also ensure that you understand the minimum pay possible that you can agree on. This is your bare bones-budget which can be created from your spending history for a couple of months.

How to do a personal financial check

 

image from https://allegiantfp.com/budget-inconsistent-income/

Account for taxes

As someone without formal employment, the burden of tax remittance lies solely on you and therefore it is important that as you plan this is well accounted for. The estimate can be gotten by calculating your average tax payouts for the last 6 months then also making sure you set that aside in your budget. Taxes are inevitable and it is costly in the long run if you avoid them, however, it is possible to legally reduce your tax burden.

 

image from http://blog.pbtc.net/4-ways-you-can-budget-with-an-irregular-income/

Other expenses and create a miscellaneous category

A miscellaneous category is to be safer if other expenses pop up in the middle of the month. The other expenses here includes everything else that is not entirely ‘essential’ but that which you consume month to month, for example, your wifi bill. Having this on paper or your worksheet ensures that your planning is easier and tangible.

Build an emergency fund and savings buffer

Notably, some months are going to be better than others. The savings buffer, especially for your recurring bills, ensures that you can keep surviving on the tough months. The emergency fund is for when the unexpected happens like absolute lack of gigs. Finances: The Importance Of An Emergency Fund

This is created from the months that bring in more money than the rest and therefore there is a surplus amount even after your savings. Additionally, a separate savings account can be created to keep sending your surplus income there when it is available after of course contributing to your emergency fund and your bills savings account. Finances: When You Should Use Your Emergency Fund

Planning for the Future: How to create a Financial Plan

Allocate yourself a fixed salary

It is paramount that one pay’s themselves a particular salary. This is achieved by having all your income flow into one checking account and allocating a percentage of it as your monthly salary. The salary here can help in planning and also ensuring that you have extra spending money on luxuries and the likes.

Rely on zero-sum income technique

Essentially, the implication here is that you use last months income to pay this months expenses and so on and so on. This also means that in the case of simultaneous ‘dry’ months one can have the safety net of their savings and emergency accounts.

Budgeting is important, it is like a roadmap for your finances.

Finances 101: How To Create A Budget And Different Budgeting Methods You Can Use

5 Ways To Grow Your Small Business To The Next Level

4 Key Financial Statements You Should Prepare For Your Business

Entrepreneurs Tips On Personal Financial Management

Share12Tweet7SendShare2Pin3
Previous Post

10 Cleaning Hacks To Keep Your House Spotless

Next Post

Entertainment: You Can Now Submit Your Entries For The Lenga Ugaidi Na Talanta Competition 2018

Mumbe Mutanu

Mumbe Mutanu

Caroline Mumbe is passionate about anything money related. She is an entrepreneur and writer who enjoys simplifying financial concepts and making sure people lead their best financial lives. She reads a lot and knows the best coffee joints in Nairobi.

Next Post
Lenga Ugaidi na Talanta

Entertainment: You Can Now Submit Your Entries For The Lenga Ugaidi Na Talanta Competition 2018

Please login to join discussion

Recommended

image from https://www.phonestablets.co.ke/product/oppo-reno6-5g/

The OPPO Reno6 5G Is Now Available In The Kenyan Market – Here Is What You Need To Know

September 17, 2021
91
Blessing Lughaho: Image from https://www.instagram.com/p/Ba-0J_7AXSv/?taken-by=blessing_lungaho

I Love Playing The Bad Guy But Such Roles Also Come With Their Challenges – Actor Blessing Lughaho

March 23, 2018
1.7k

Popular Story

  • images of https://cookpad.com/ke/recipes/10628962-beef-pilau

    5 Different Ways To Cook Pilau

    6355 shares
    Share 2542 Tweet 1589
  • Skincare: How To Do A DIY Vajacial At Home

    8201 shares
    Share 3280 Tweet 2050
  • Travel: Everything You Need To Know About The Nairobi Commuter Train Schedule

    6372 shares
    Share 2549 Tweet 1593
  • Health: 7 Benefits Of Purple Tea You May Not Know About

    2411 shares
    Share 964 Tweet 603
  • How To Start A Highly Profitable Mitumba Business In Kenya

    14521 shares
    Share 5808 Tweet 3630
Potentash

Potentash is an award-winning lifestyle blog. We publish lifestyle content that intersects with health, women, beauty, travel, business, relationships, finances and entertainment.

Categories

  • Ethics Statement
  • Terms & Conditions
  • Privacy Policy
  • Contact Us

Copyright © 2022. Potentash, In Partnership with Decima

  • Login
No Result
View All Result
  • Business
  • Entertainment
  • Fiction
  • Lifestyle
  • Travel
  • Skin + Beauty
  • Health
  • Relationships

Copyright © 2022. Potentash, In Partnership with Decima

Welcome Back!

Sign In with Linked In
OR

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In