Friday, June 14, 2013, AM | Leave Comment
When you’re looking for budget advice, most people will simply tell you to draw up a list of your monthly incomings and outgoings, and stick to it rigidly. However, if your work is seasonal or irregular, it might not be possible to draw up such a clear budget planner. Hiring seasonal workers is becoming popular with employers who need people for the Christmas rush, or those who deal with tourists, but it can be difficult if you have certain months of the year with little or no income.
Here are a few ways to stay in the black when you’re going through a dry spell.
One of the advantages of seasonal work is that it often pays a generous hourly rate, and you can often get plenty of overtime. Take advantage of these opportunities as much as you can, and don’t be tempted to blow your pay packet as soon as you get it. Open a savings account and either put away a percentage of your net pay, or deposit any extras from overtime or bonuses. This will soon build up, and means you don’t need to worry as much when you’re out of work. Just make sure you choose an account where you can access the funds easily.
Look to the future
Many seasonal workers are in the younger generation, but it’s important for them to think about their future too. Although retirement may be a long way off, take a look at a pensions calculator to see how much you might be living on when you retire. This will help motivate you to put away cash, and help you look at money from a long-term perspective.
Draw up a budget based on the year. Use your payslip to find out your net pay, then times that by the number of months you work each year. This will give you your salary.
You can then work out annual amounts for your:
- Rent or mortgage
- Utility bills
- Debt repayments
- Transport costs
When you see these figures on an annual basis, it’s much easier to work out the average costs throughout the year, meaning you can budget based on this. It’ll also show if you have any money left for a rainy day.
Set yourself targets
If you work on a freelance basis, or any job where work is irregular and not guaranteed, it can help to set a target for the amount you need to earn each month. This ensures you stay focused on your work, and aren’t tempted to slack off after a successful month. This amount should represent the basic amount to pay bills, eat, and keep a roof over your head, and then any extra you make can be used for fun stuff or savings.
Having a target can also help freelancers focus on their work, making them more determined to bid for new contracts rather than just coasting by on one project. If you know you need a minimum amount, you’re much more likely to work hard to achieve it.
Re-jig your bills
Most payments related to housing are made on a monthly basis, but some things can be paid on a quarterly or annual basis. This can make it easier for those on an irregular income to pay things such as utility bills. Don’t be afraid to pick up the phone and negotiate with your creditors for flexible payment terms, as they will often be receptive to an offer, as long as your balance is going down.
Beware of surprise costs
We’ve all had that moment of dread when a big tax bill, or expensive car repair has come up, and for those on an irregular or seasonal income it’s even more important to ensure you have a buffer for these costs. Set up an emergency fund that’s separate from your normal savings account, and only dip into it for expenses that are absolutely vital to your everyday life.
Being a seasonal worker can make it more difficult to budget, but it certainly doesn’t mean you need to be broke during quiet periods. As long as you spend sensibly and put money aside, you should be able to get through the lean times, and enjoy some well deserved time off before your next job.
About the Author:
Hollie Lynch is a freelance business writer from Money Vista, a financial planning tool from the Royal London Group. It features a pensions calculator among others things for helping people manage their money better.