Taking control over our finances is something all of us should do but it often seems like a chore to get started. Budgeting can often seem complicated, time-consuming or downright useless. However, there are plenty of reasons to take the plunge into better financial management – less stress, less pointless purchases, more money to spend on the things we enjoy. This can be even more important for those who have irregular incomes because there’s no payday pattern to work with. This makes it difficult to know how much money you have left for the rest of the month and can lead to dangerous spending habits that can catch up with you further down the line. With this in mind, here are 10 reasons why you should budget your irregular income.
Taking the time to work out an irregular income budget allows you to take control over your finances. This will simplify the way you spend money because you know exactly what you have left to spend at any given time. In the long run, budgeting will help to prevent a lot of money issues that build up over time.
Budgeting brings structure to your spending habits. When you know things are a little tight, you can focus in on trying to earn more whenever possible or cutting back on spending if required.
Having an irregular income can cause issues in the short term when plans such as social events pop up without much notice. Budgeting can help you to set aside some money to do things with your friends and family when opportunities arise.
Likewise, budgeting can also help you to set aside any excess cash you have for longer-term goals. These could be serious things like a deposit for a house or money for a new car but could also include fun things like saving for a big holiday or for Christmas. This is important if your income is irregular as you could find yourself panicking when big events come around if you haven’t been able to save.
Stress can cause all kinds of issues – lack of sleep, depression, anxiety, reduced performance levels, and so on. This is especially the case when you’re worried about money. Budgeting is a way to help reduce stress because you know you’ve prioritised for the things that matter the most.
One of the issues with irregular income for some people is that it can leave them short at times of the month when bills come around. This can lead to people taking out short-term loans or using credit cards, which then adds more complications to the mix. Budgeting for bills is a good way to avoid this pitfall.
Similarly, it can be difficult to plan for emergencies such as cars breaking down, technology needing to be replaced, and so on. This kind of thing costs money but can leave you in a mess if you haven’t planned. Budgeting can help you to set aside money for emergencies just as easily as it can for social spending.
When people don’t budget, they can find themselves spending money on things that they don’t need and won’t actually use. It’s easy to overestimate how much money you have available to you if you have an irregular income, but budgeting resolves this and will make many people realise that they don’t have the excess cash to splash on junk.
Habits form when we repeat a pattern of behaviour over a long-term period. Many people think of habits as a bad thing, but they also include positive traits. For example, brushing your teeth in the morning is a positive habit you have developed since you were a child. Budgeting can help people with an irregular income to find financial control in the short-term but can also develop positive money management skills that can be continued indefinitely, regardless of financial situation.
Although having an irregular income doesn’t necessarily mean that you have a low income, it can be the case in some instances. Having to budget can be difficult at times if you don’t have a lot to spare. However, it can be the inspiration you need to find further sources of income to supplement the more fun things in life or help you reach your financial goals.
Are you ready to start budgeting your irregular income? Here's a useful guide to get you started and our recommendations for the best budgeting apps.
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