If you work freelance or own your own business, you are well aware that your monthly income can vary widely. You might do great one month, only to find yourself barely scraping by the next. How can you establish a budget when on this feast-or-famine schedule?
Outline Your Budget
The first step is to determine exactly how much you spend each month on essentials such as housing, food, and transportation. Once you know how much you need to set aside each month for the basics, you can come up with a plan of action to ensure you don’t fall behind on payments.
Next, write down any annual or biannual expenses such as property taxes, self-employment taxes, insurance, and other irregular payments. Add your yearly totals for both regular expenses and sporadic expenses and divide this number by twelve. This represents your average monthly cost of living.
