Anyone in the business of direct sales knows that for the most part, their paychecks are inconsistent. You might have a really stellar month filled with parties, vendor events, and newly released products that your customers want to take advantage of. Other times, you may find your sales lackluster and your income dips a little. How is a girl supposed to budget with such a fluctuation in income? Don’t worry, I’ve listed 3 ways for you to learn how to budget with inconsistent income from your direct sales business!
The first thing before you even look at your paychecks when they start coming in, is what goals do you have for your direct sales paycheck? Where will each dollar go? Create three categories on a piece of paper and calculate just how much each month needs to go to each category. For example:
- MUST HAVES: These are the basic living essential items you are using your direct sales income to pay for. Food, housing, clothes, gas, etc. Total up just how much each month needs to go towards these necessities and write it down.
- PAY IT OFF: You might be using your direct sales income to pay off debt you have accumulated over time. Calculate how much of your direct sales income needs to go to these goals and make a note in category #2.
- FUN EXTRAS: This amount will be calculated after your receive your paycheck and categories 1 & 2 listed above are taken care of. The higher the paycheck, the large your “Fun Extras” category is!
Bonus Tip: Roll over your “Fun Extras” category from month to month and you will instantly have a cushion of money to cover your necessities and debt payoff categories when the paycheck amounts take a dip.
Having a fund separate from your normal checking and savings account is crucial when budgeting with an inconsistent income. This miscellaneous fund, as I call it, is set so that your unexpected expenses and once a year expenses are taken care of. Think of car repairs, surprise doctors appointments, yearly credit card fees, or yearly subscription fees. Wouldn’t it be nice to already have the money set aside for these items so that when you got the notification in the mail there was no panic and no thinking, “where will I get the money for this?” A Miscellaneous Fund is the answer and I’ve outlined just how to set this up right HERE.
Like anything in life, you can plan so much but, there will always be times when you need a Plan B. In the case of budgeting with your inconsistent income, you’ll want to figure out a backup plan for when your paychecks are not as big as you would like them to be. Ensure your Must Have Category is taken care of. In the event, your paychecks dip below that amount, consider alternative ways to increase your income in the short term. Another option is a zero interest rate credit card to see you through and make it a priority for the paychecks to follow to pay off that debt.
Using the three steps above, I know you will get your paychecks under control. Once you have a clear idea how much and where your paycheck is going, you will feel confident to reach your financial goals no matter how your income fluctuates. As direct sellers, we are creative, hard-working, and dedicated. Use your skills to rock your direct sales business and you will always be prepared no matter how large or small your paycheck is. Still need help, guidance, or have questions? Comment below or send me a message!