I recently wrote about how direct sales income can fluctuate and how to budget when you have an inconsistent income. One of the key points in your plan to budget is to set up a miscellaneous fund. This special fund is separate from your normal checking and savings accounts will help you along your path to financial freedom! Read on to find out more about a miscellaneous fund and how to set it up!
First let’s talk about why it’s important for you, as a direct seller, to have a miscellaneous fund. In direct sales, your income is not guaranteed and it’s solely based on sales from parties, vendor events, and special products customers are clamoring for. Wouldn’t you love to be prepared as much as you can for those unexpected expenses and things that pop up once a year? Of course, you would! Read on to find out what things are paid for by your miscellaneous fund.
Like I mentioned, a miscellaneous fund is set up solely to fund those unexpected expenses and the bills that come once a year. For example, my miscellaneous fund is set to cover any unexpected medical bills, car repairs, house renovations, and things like my Sirius radio subscription. When any of these things pop up, I don’t panic, I don’t sweat, I know that I already have the money set aside to cover these things without having to dip into my checking or savings accounts.
It’s really easy to set up your miscellaneous fund. First, you’ll need to figure out how much per month should go into this separate account. Take a piece of paper and write down the bills that come around once a year and total it up. Divide that number by 12 to see the monthly amount you need to put aside for those once a year bills.
Then, to keep it simple, estimate $150 a month to cover any unexpected medical, car or house repair. (If you can devote $50 a month to those 3 items, that is great! If not, don’t fret! Start small and work your way up!)
Now that you have your monthly amount set, contact your bank or credit union and have them open a separate account where the money deposited each month will only be used for these unexpected and yearly fees. When something comes up, you’ll already have the money set aside! You’ll become more confident with your finances and will be on the path to financial freedom!
How great will you feel when that unexpected doctor’s appointment happens? Or your garbage disposal breaks? Planning for the unexpected and the yearly bills with a miscellaneous fund will make your life easier and get rid of the “paycheck to paycheck” way of life. Have more questions about how this works? Comment below or send me a message!
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[…] 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. […]