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How to Create a Budget When You Don’t Have an Income

When you don’t have a steady paycheck, it’s easy to rationalize not needing a budget. After all, if you don’t have any money coming in, why should you worry about how you spend it?

In fact, having a budget is even more critical when you don’t have a steady income. Having a budget allows you to prioritize expenses and maintain control of your finances. Having this control can help you to stay out of debt, be prepared for emergencies, save for the future, and build a stronger financial foundation for when you do have a steadier income.

Here are a few rules to follow that will get you started.

1. Know Your Baseline

The first thing you need to do to create a budget is to know your baseline in terms of expenses. Even if you’re living at home and not paying rent, you are still spending money.

Whether it’s the latte you buy at Starbucks while you’re sending out resumes, travel expenses to and from interviews, or the occasional meal out with friends. Everything counts.

2. Assess Your Income

Next, assess your income. Even if you’re not fully employed, you may have savings, part-time work, or “gigs” that provide you with some income. Even if these are unsteady, try to assess how much you are bringing in each month. Make sure that you make your determination based on what you’re making now, not what you hope to make in the future.

3. Look for Places to Save

As you review your expenses, try looking for places to save. Need a cup of coffee to start your day? Trying brewing it at home, and working at the library. Look through your credit card statement, if there are recurring fees for subscription services or memberships that you aren’t actively using, cancel them. You can always rejoin later.

Take the savings you find, and apply it toward your income, or better yet, use it to start a saving’s fund.

4. Write Yourself a Paycheck

Once you’ve determined what you honestly need to spend each month, create your budget based on that number. Then “pay” yourself that amount each month. If you find you’re making more one month, don’t be tempted to spend it. Instead, set aside the extra and put it into savings. That way if you find there’s a shortfall in future months, you’ll have the resources to help cover the difference.

One good way to juggle your balances is to open up additional savings accounts. Deposit your earnings there and then “pay” yourself from the account.

Looking for help creating a budget?  Talk with a Certified Credit Counselor. They can help you to organize your finances and make smarter choices when it comes to creating a stronger financial future.

Want to learn more? Schedule a free counseling session today or call us at 800-920-2262.

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