Making ends meet on an irregular income

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Many of the families that live in Archuleta County earn their income from the tourism industry, self-employment, ranching, commissions or retail.

These can be excellent sources of income, but, because of the nature of these industries, income is usually variable from month to month. Budgeting for irregular income, yet still meeting expenses each month and adding to savings and retirement can be a challenge.

The following tips, taken from an article written by Laurel Kubin and Glenda Wentworth, Extension educators with Colorado State University, might help you live well and make ends meet on an unpredictable income.

Calculate your income. Estimate your income based upon the minimum monthly amount you can count on. Planning to use your minimum monthly income rather than average monthly income can give you a buffer of safety. When there is more than minimal income, this allows you to afford additional items that may be wanted, not just needed. Use last year’s tax records to help estimate the amount of income to expect. It is better to underestimate income than to overestimate. Finding ways to get extra income like doing gigs to making money reading emails is much easier than cutting back.

Create a spending and savings plan based on paying essential living expenses. Spending plans work best when the whole family is involved in making decisions about expenditures. Communicate with each other about individual and family financial goals and how those goals might be achieved with the income that is available. The spending plan should include categories for savings, monthly and periodic expenditures. Think of your expenses in three categories: fixed, variable and periodic.

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