Irregular Payments Budget Calculator
This calculator breaks down your irregular payments (i.e. auto insurance, home insurance, and tuition) into their monthly equivalents. In the fields provided, input a description for each payment, the number of times the payment occurs each year, and a dollar amount for each payment. You’ll automatically be provided with a monthly amount for each expenditure.
Once you’ve inputted all your irregular payments, you’ll see the total amount per month you’re spending on your irregular payments. If you press CREATE REPORT, a separate browser window will open with a printer-friendly report.
How to Budget When Dealing With Irregular Payments & Expenses
Budgeting is never easy, even for the most mathematically and economically inclined. It can be significantly more difficult for people who do not receive a steady paycheck. Sales employees who work on commission, freelance professionals, and small business owners in particular are susceptible to the strains of inconsistent payment. Employ these five tactics to navigate the tricky circumstances.
Create a List of Your Fixed Expenses
Understanding your role in the budgeting system goes a long way toward alleviating the pressure of steady bills with unreliable income. Identify the payments you make each month that cannot be delayed.
Everyone needs heat and power, whether they are included in the same bill or not. Other unavoidable expenses are housing and transportation. You need a roof over your head, and whether you use public transportation or own a vehicle, there are expenses involved with each of them as well. The only exception would be if you have paid off your car already. Even then, there are considerations that must be addressed in a moment. Whatever your situation, these are basic, universal expenses.
Similarly, a lot of other services have grown unavoidable in recent years. Internet and cell phone service or, at the very least, one of the two is required to maintain access to the world around us. Some people will want to have cable television as well. Determining which of them are needed goes a long way in helping you plan your unavoidable monthly expenses.
Create a Potential List of Your Unpredictable Expenses
Yes, this sounds like an impossible exercise. By definition, you have no idea how much you will spend on transportation, food, or emergency expenses in a given month. Do not dismiss the idea for this reason. Instead, take the time to remember all of your previous emergency expenses. How much was the average cost? What was the worst unexpected payment you had to make?
With regards to transportation, you should at least have an idea of how often you need to refill your tank with gas or use public transport to reach your destination. Similarly, you know from experience how much you pay at the grocery store each visit. You also have a good idea of how much you spend eating out each month.
Plan for the Worst Rather Than the Average
Do not take the average of your expected costs. That is an easy mistake to make. Remember that you are not budgeting for an average month. You are anticipating worst-case scenario events. If you spend an average of $500 at the grocery store each month and plan to have that much saved prior to your next paycheck, you are out of luck if you have a lot of company that month.
Visitors expect to be fed and provided beverages. Your $500 will shrink in size, and you will be left holding the bag if you wind up needing $650. Planning for the worst case scenario is the way to ensure you can always pay your bills.
Start Tracking Your Finances
In reading the above, you should already be thinking about this. How much easier would managing your payments be if you already had a grasp of your historical expenditures? The information you had to estimate above is suddenly something that can be researched based on your own behavior. Having a working understanding of expenses empowers you in projecting future payments.
Anticipate When You Receive Income
Tracking your income is no different than tracking your expenses. The sporadic nature of your income doesn't change the fact that you wind up with at least roughly the same amount every year. What you need to do is break down the earnings into a methodology that can keep your bills paid on a monthly basis.
Something important to remember is that the inverse of the above strategy for payments applies. With those, you allowed for the worst case scenario, assuming the most expensive possible payments. With your earnings, you have to anticipate the least amount of money each month in order to avoid surprises. Otherwise, you may anticipate an average monthly income, only to be left short-handed when some of your salary gets deferred. Such a situation would leave you unable to pay your bills.
Having sporadic income can be tricky. If you use the five tips above, however, you can train yourself for how to plan for every contingency. In the process, you will be pleasantly surprised any time you wind up earning more than expected.