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But that doesnt mean you cant or shouldnt do it.
Quite the opposite:Budgetingbecomes even more mission-critical when you have fluctuating income.
Identify your baseline expenses: What youmustcover each month with no leeway.
In lean months, you might need to stick with just those baseline expenses, no frills or thrills.
Ask yourself, Am I spending too much money dining out?
Can I take up biking to decrease the costs of gas?
Small, crafty changes can make a big difference in your wallet when your budget is in flux.
Start with a lean baseline budget you might always splurge when your income allows it.
That wont happen overnight, of course.
That could take several years to fully fund, but dont let that intimidate you.
Start small and work your way there, Richner continued.
Save at least 10%, and many experts suggest 15%, 20%, even 30%.
Whatever it is, choose what works for you and stick to it.
Setting the amount is only the beginning.
Now it’s crucial that you execute and actually set that money aside each month.
Set it and forget it, recommended Laurie Hise withPassionate Penny Pincher.
Automate your savings so you do it without thinking.
And to do that, it helps to give yourself a regular paycheck after all.
Create a system where you distribute your income evenly, just like a steady paycheck, advised Seiler.
Set up your savings account so you’re free to pay yourself monthly without draining your reserves.
As for how much you might safely pay yourself as a salary, Richner offers this recommendation.
:If you take out the outlier month, you are left with amore realistic income baseline.
Fail to do so and Uncle Sam slaps you with penalties and interest.
Open aseparate bank accountfor taxes and pay into it every month.
You need sufficient savings to cover estimated prepaid taxes, which most self-employed people pay quarterly, noted Kilgore.
Freelancers and business owners dont have that safety net, he explained.
Maintaincomprehensive health insuranceto protect you from expensive medical bills.
Richner also recommends self-employed workers consider adisability insurance policy.
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