As a bartender and freelance writer, my income is now completely variable. From week to week, my tips and invoiced articles depend on the economy, strength of my pitches and market saturation. Recently, things have slowed down and made me antsy.
When I get nervous about money, I obsessively crunch numbers. Since I was in college, spreadsheets and kept receipts have been a kind of financial security blanket. Tracking every penny I earn and spend gives me (at least) the illusion of control. Currently, my plan is based on the tricks I've learned over the years of saving my pennies.
- Calculate your baseline income. Do you have a monthly column? Weekly blogging gig? How about a part-time job? This money defines your budget for your basic expenses. Keeping within this amount can ease your basic money worries.
- Map your basic expenses. Chart your costs for rent, utilities, insurance, credit card payments, etc. When you get a check or tipped out, immediately set this amount aside.
- Define other categories of costs. Food, gas, household items and personal care can be much more easily paid in cash. Divide the month up into manageable chunks and put the amount for each category into an envelope. Once the envelope is empty, you're effectively broke.
- Give yourself an allowance. If you're used to earning and spending freely, having something to spend at your discretion can make even the tightest budget more manageable. But, as in other categories, once it's spent, it's gone for that period.
- Save an emergency fund. Put $10 aside for every check or tip out you receive. Getting into the habit of saving even the smallest amount of money can add up quickly. After a few months, even the smallest amount of savings can provide a buffer if your income falls.
- Save your pennies. Seriously. Adam and I have now gone on two vacations from saving our pennies and using reward credit card for baseline expenses. However, for those who are starting out budgeting, don't touch the plastic. Establishing a cash-based system gives physical reinforcement when the amount is spent.
Have any freelance budget tips of your own? Pass 'em along!