For most of my adult life, I’ve lived on a slightly erratic income; owning my own business with my husband and substitute teaching incomes can vary from year to year. At the beginning of this year, I budgeted out my expenses and savings goals based on income made over the past 2 years. I used my Quickbooks pie charts and income and expense reports to help me see where we spend the most money, where we can save money, and the actual cost of our neccessitites. It also gave me an over view of what our income usually is month by month and annually. The budget was very detailed; I made sure to include all expenses and savings contributions. Well, guess what? My income hasn’t been close to what I’ve made the past two years, it’s down about 10-15%. Crap!
So, what does this mean? Well, so far I’ve realized that I’ve still been able to pay all of our bills and pay more towards our crummy line of credit. Which means that I need to revise my budget once again; I can live off $5100 a month instead of the $6500 I had budgeted at the beginning of the year. However, I’m noticing that with the reduced income, my savings account has stagnated. That missing $1,400 or more has really affected the amount I can save. Can I reduce my living expenses? Perhaps. If the rest of the year continues to be like the first four months, then I’ll have to. Of course, this past month I’ve noticed an increase in income which makes me think the year just got off to a slow start and I might be able to make up the lost income over the next few months.
This I think is one of the drawbacks to being self-employed; when business is slow, your income is greatly reduced. Being a positive thinking person, seeing last month’s income increase back to normal levels gives me hope for the remainder of the year. This summer I will have to get creative with income-generating ideas, I’ll have time since school will be dismissed for the entire 12 weeks. Now if only my passive income generators would kick in!
If you checked out my original erratic income post from last year, you’ll notice that my income is still erratic, but quite reduced.
Do you live on an erratic income? Or, do you know exactly how much your making all year long? Which do you think would be more difficult to budget for?
