Having a budget is the foundation of managing your money. Making budget is easy when you have a dependable income that’s the same every month. But what do you do when your income varies from one month to the next? This is the case for many contractors and freelancers. Your expenses remain the same, but your income doesn’t. You still need a budget and you can make one. You have to go about it differently.

Total your expenses

When you’re making a variable-income budget, start by totalling your income as you would if your income was fixed. Add up the things you spend money on every month. This includes rent/mortgage, utilities, car note, car insurance, health insurance, life insurance, phone bill, loan payments, credit card payments, and taxes. You should even calculate how much you’ll spend on variable expenses like gas and food.

Average your income

If you had a variable income last year, too, use your last tax return to come up with an average monthly income. Just divide your gross income by 12 to come up with an average monthly income. If you don’t have a year’s worth of income, average the months you have. For example, if you’ve been freelancing or contracting for 7 months, add up the last 7 months of income and divide it by 7. This will give you an average income to base your budget on.

Does your average monthly income exceed your expenses?

Your average monthly income needs to meet or exceed your expenses. If not, you’re going to run into a cash flow problem. Adjust your expenses to fall below your average monthly income. Some examples of places you can cut back are: gas, food, utilities (save on electricity), and entertainment. For more ways to cut your expenses, go through each category and decide whether it’s a need or a want. Wants can be cut out.

Your budget in practice

You’ll need to have at least three accounts – one checking account and two savings accounts.

The checking account will hold your monthly income that you use to cover bills and other expenses.

One savings account will hold your income then be used to “pay” yourself at the end of the month.

The other savings account will be for savings. You will only deposit money into this account. You will never withdraw money from it unless it’s to invest it in a higher interest rate account.

Start your budget at the beginning of the month. Your checking account needs to have enough in it to cover your expenses for the month.

As you get paid throughout the month, put the money into Savings Account #1. You shouldn’t have to touch your savings account during the month. If you do, then you didn’t budget enough for your expenses or you’re overspending (or you ended up getting paid less than average, see below). At the end of the month, around the 28th, transfer $2500 (or what you need to cover your expenses) into your checking account.

Less than average months vs. higher than average months

When your income varies, some months will be less than average and some will be higher than average. Once you’ve been using this variable-income budgeting method for a few months, you won’t notice the ups and downs of your budget as much. The surplus months will build up your savings account to help offset the “famine” months.

However, if you experience a “famine” month in the first 1-2 months of using this variable-income budgeting method, you might have trouble meeting all your financial obligations. In this case, you have a few options. Cut back on some of your expenses (the best option). Pull from your emergency fund (which ideally has 6-12 months of living expenses). Pull from your savings (only when options 1 & 2 don’t work).

Don’t let a famine month discourage you. Like I said earlier, once you have a couple of months where your income is at or above your average income, your savings will build up and the bumps will smooth out. Give it six months and you’ll be happy you did.

Although taking care of your money sounds quite easy, the truth is that it can be quite difficult. There is no reason to feel ashamed because of this and you are certainly not the only one who might be having problems managing their money and bad debt. The truth is that many people are dealing with this and have been dealing with this for some time. Taking out loans, having credit card payments, mortgages and more is enough to put you into a serious bad credit situation. You might feel like you are drowning in a sea of debt that you will never get out of. The goal of this article is to help you gain some great information in order to change your financial situation for the better.

You can learn how to manage your finances in the proper way in order to create a positive financial future. There are many different techniques as well as tips and tricks that will help you get things under control. As a matter of fact, these tips and tricks can show very soon and in a short amount of time, you will be on your way to being debt free and having a great financial situation. Putting the tips and tricks that you learn to use is what will make things improve for you and get you started on the right path.

You can take advantage of audio disks, to help you gain information that will help you improve your situation and take care of the mistakes you may have made in the past. Audio cd’s, books and even internet resources can really have a lot of effect on your bad debt and help you learn the truth that will make a big difference when it comes to how your future financial situation turns out. They can be your saving grace and help you come up with different ways to improve your financial future for yourself and your family.

Managing your money is as easy as learning how to get rid of the bad debt early so that you will set yourself up for a great future. You will be preparing yourself for less stress as well as the health risks that come along with the debt related stress. Learning now is the best way to ensure a great future that is happy and stress free. Knowing what you need to know now has a great affect on your future debt situation. A lot of young adults don’t learn about money and how to manage finances properly. Debt shouldn’t be something that we are afraid of, but something that we know how to manage and take care of. Good luck on your financial future and your success.

Sure everyone want to be debt free for various reasons. Here are 10 fabulous reasons why you need to take action now and do something about eliminating your date today:

1. Your stress levels over money will become lower and you can focus on the important things in your life, such as family, friendships, and your future.

2. You will be able to venture to the mailbox without hesitation of what you will find inside since you are used to dreading late notices. Your mailman is no longer to be considered a messenger of doom.

3. You will have confidence knowing that if something unfortunate where to happen to you, your family would not be burdened by your financial decisions.

4. You will set a good example to your children about financial matters. They will be able to learn first hand about the dangers of overspending and poor money management, as well as the importance of being aggressive about paying down your debts and living a debt-free life.

5. You will be conscious of the accomplishments you can achieve once you put your mind to it. You will also understand the importance of focus by going after what you want.

6. You will no longer have to rely on credit cards to pay for your daily living expenses and then suffer through the guilt of irresponsible credit card use for days afterwards, worry about the bills you can not pay.

7. You can start implementing a solid plan for savings that allows you to dream about your future plans instead of dreading those years.

8. Through the journey of becoming debt free, you will learn how to live a different life and will experience a shift in thinking that allow you to continue managing your money long after you are debt free.

9. You will be an inspiration to others who are finding themselves deep in debt. Your experiences could change the lives of many other people who are going through now what you have already pulled yourself through.

10. You can proclaim you are debt-free and proud of it. You no longer are burdened by the thoughts, feelings, and emotions that come along with debt. Start living life instead of avoiding it.

There are so many more reasons surely you can think of to start working towards a life free of debt. It will not be the easiest or the most fun adventure of your lifetime, but it will certainly bring you a lifetime of stability, security, and financial success.

Are you interested in having more money in your savings account and getting out of debt? Did you know that if you use a budget spreadsheet you will have a much better chance to get out of the debts you might have and you will have a better control over your finances? There are many ways to make sure you can pay off debts and save money. Here are some reasons why the right system will help you so much.

First, when you use a tool to help you budget you will actually be doing something very good for your financial situation. The tools that are available for you to help you with your financial problems can literally change your life and the life of your family. This is very important to know and you should understand that most people struggle with money so you are not alone when it comes to needing help with your finances.

Second, a budget spreadsheet can make life much easier for you because it can literally break down your expenses and your income into categories so that you know where your money belongs instead of going into your finances blind. Using the right budget spreadsheet will help you stay organized and really will help you to know where you money belongs each and every time you get paid.

Last, you should also know that you can usually get one of these types of tools to help you with managing your money for free. They are all over the place and even though there are some great ones that do cost money you should be able to find something that is very good for free somewhere online. Then, you can customize it to fit your life and what your expenses and income are. The main thing is that you get the help you need to get out of debt and begin to save some of your hard earned money.

When you start managing your own money, you begin to realize how much there is to organize, especially if you have a variety of assets on top of your regular checking, savings and credit card accounts. A money manager has to be able to keep track of loans and investments, as well as spending and income. One way to make this easier if you are managing your own money is to use personal finance software.

Using the computer to manage your money

Personal finance software is designed to help you keep track of your income and expenditures, but many programs are also designed to help you organize your investments and other financial transactions. It is possible for you to update your accounts and reconcile them when statements arrive, and to make changes when you do something new. The computer can make money management much more efficient and organized.

Backing up your financial information

Computers, of course, are fallible. Sometimes they crash, and information can be lost. If you use personal finance software to help you manage your money, it is a good idea to back it up when you make changes. You can do this by putting the information on disk, or on an external drive, like a zip drive, external back up drive or a flash stick. It is important to back up your financial information so that it is not lost if your computer has problems. It only takes a few seconds, and it can save your hours of work re-entering all of the information.

If you want to be your own money manager, it can be done with a little education, and some help from a personal finance software program.