A Quick Tip for Waking Up Early to Write

It’s hard to make time for your own stuff. You likely have other priorities that take up most of your day, like work. Work always gets in the way, doesn’t it? But alas, you have bills to pay, mouths to feed, and money to make. I used to run into this problem when I...

read more

How to Deal With a “Vulnerability Hangover”

You just put yourself out there. Maybe you confronted a friend or asked your boss for a raise or Tweeted a passionate opinion. Now, you feel exposed. But it's too late. You can't take back what you've said, requested, or expressed in 140 characters. Maybe your hands...

read more

How to Thrive at Work When You’re an Introvert

This is a guest post from Will Chou of willyoulaugh.com. Introvert. That’s what I am labeled as. And usually, it’s not a good thing. Most of the Western world seems to view this classification as a handicap towards success. It sucks when you’re too shy to network or...

read more

How to Answer “What Do You Do?” When You’re a Freelancer

You go to a party and, circling the snack table, you meet someone new. He asks how you know the host. Do you live in the neighborhood? If so, have you tried that new restaurant that opened up? Everything is going just peachy, but you know at some point, this guy is...

read more

How to Use the Anchoring Bias for Negotiating Salary

When it comes to negotiating salary, most of us need all the help we can get. I'm convinced that 90% of learning how to negotiate is just getting past the implosive mixture of feelings that keep you from asking in the first place: guilt, shame, inadequacy,...

read more

Why “Grow Thicker Skin” Is Bad Advice for Writers

Sensitivity isn't exactly embraced in our culture. It's considered weak, whiny, and vulnerable. It's much better to be impassive, indifferent, and thick-skinned. Here's another idea. "Grow thicker skin" is some of the most useless advice around on how to deal with...

read more

kristinwong

Hey! I’m Kristin. a freelance writer and journalist (you can find my stuff at Lifehacker, NY mag, the NY Times, and more). Here, I share what I learn about how to freelance, from managing money to digital nomading to figuring out why the Wi-Fi isn’t working. 

What You're Saying

How I Budget With a Variable Income

how to budget variable income1Freelancing is great, but there are some things I miss about full-time employment:

  • Free coffee
  • Mingling with coworkers
  • Cheaper health insurance

And a steady paycheck. For the most part, my income doesn’t vary too much from month to month, but it does vary. Even though I have the luxury of steady work, there are still certain factors that can make my monthly income difficult to predict, like how long it takes a client to pay. Here’s how I’ve learned to budget with a variable income over the years.

I Budget Based on an Average

The lady who cuts my hair once described her freelance business as “feast or famine.” You can feast like a king one month, and then find yourself eating Ramen every day the next. You don’t want to budget based on “feast” months because, during those months of so-called famine, you won’t have enough to pay the bills.

Instead, I budget according to my lowest paid month from the past 6 months. I use that amount to come up with a spending plan using zero-sum budgeting. With a zero-sum budget, you list all of your basic living expenses, budget for them, then put the excess to work, giving every dollar a specific job, whether it’s paying off debt, saving for retirement, or some other goal.

My budget errs on the side of caution, but if your income doesn’t vary too much and has been fairly steady for the past year, you might just consider using your average income from the past twelve months. This way, you’re sort of getting the best of both worlds. When your salary is higher than average, you can save the leftover amount. When your salary is lower than average, you can use that leftover money to pay yourself more.  read more…

kristinwong

Hey! I’m Kristin. a freelance writer and journalist (you can find my stuff at Lifehacker, NY mag, the NY Times, and more). Here, I share what I learn about how to freelance, from managing money to digital nomading to figuring out why the Wi-Fi isn’t working. 

What You're Saying

A Quick Tip for Waking Up Early to Write

It’s hard to make time for your own stuff. You likely have other priorities that take up most of your day, like work. Work always gets in the way, doesn’t it? But alas, you have bills to pay, mouths to feed, and money to make. I used to run into this problem when I...

read more

How to Deal With a “Vulnerability Hangover”

You just put yourself out there. Maybe you confronted a friend or asked your boss for a raise or Tweeted a passionate opinion. Now, you feel exposed. But it's too late. You can't take back what you've said, requested, or expressed in 140 characters. Maybe your hands...

read more

How to Thrive at Work When You’re an Introvert

This is a guest post from Will Chou of willyoulaugh.com. Introvert. That’s what I am labeled as. And usually, it’s not a good thing. Most of the Western world seems to view this classification as a handicap towards success. It sucks when you’re too shy to network or...

read more

How to Answer “What Do You Do?” When You’re a Freelancer

You go to a party and, circling the snack table, you meet someone new. He asks how you know the host. Do you live in the neighborhood? If so, have you tried that new restaurant that opened up? Everything is going just peachy, but you know at some point, this guy is...

read more

How to Use the Anchoring Bias for Negotiating Salary

When it comes to negotiating salary, most of us need all the help we can get. I'm convinced that 90% of learning how to negotiate is just getting past the implosive mixture of feelings that keep you from asking in the first place: guilt, shame, inadequacy,...

read more

Why “Grow Thicker Skin” Is Bad Advice for Writers

Sensitivity isn't exactly embraced in our culture. It's considered weak, whiny, and vulnerable. It's much better to be impassive, indifferent, and thick-skinned. Here's another idea. "Grow thicker skin" is some of the most useless advice around on how to deal with...

read more