Let’s be real, after graduating college, a lot of us aren’t starting out with the traditional 9-5. The current economy makes things worse with employers cutting the amount of new hires they’re willing to take on.
Many personal finance articles out there focus on budgeting with a consistent income. Of course, you always want your expenses to be less than your income, etc. But, what happens when you’re income is inconsistent because you might be unemployed one month, working a part-time retail job the next, and then doing a year of service?
As a recent college grad, I’ve found myself resisting creating a plan for my money (aka a budget) because I haven’t started my full-time job, yet and I won’t for a couple months. Instead, I’ve been doing various side hustles and recently picked up a steady part-time job.
What I’ve realized is that a strict budget isn’t helpful when my income is so small and I’m living at home. Luckily, I don’t have many fixed expenses at all, so it doesn’t make sense for me to focus on tracking expenses.
There have been a few things that I have implemented, however; that have made me more confident in managing my money during this time. I want to share with you these strategies that I’ve used to create a plan for my money even despite living on inconsistent income. By using these tactics, you can start building some good money habits and working towards financial goals without having to commit to a strict budget.
1. Keep a separate checking account for income
One thing that I’m really glad that I did is create a checking account separate from my savings account where any income I do make goes first. This gives me an idea of how much money is coming in. I use this account for expenses and any savings or investing that I want to do that month. Like I mentioned, my expenses are pretty low, so I don’t have to keep a strict budget. I just monitor this account to make sure it’s never negative.
2. Create a small debt payoff, savings, or investment goal for each month
About two months ago, I promised myself that I would invest $200 every month from money that I earned. I didn’t want to dip into savings for this goal, so I’ve had to find a way to make $200 each month. So far, I’ve stayed true to this goal.
I’m a strong believer that everyone should create financial goals for themselves no matter their financial situation. If you have a lot of student loans and are meeting the minimum payments, try challenging yourself to increasing that by even just $20 each month. Or, you can set a savings goal to build an emergency fund. I like the added incentive that these little goals give you to try increasing your income. Since the goal is so small, it’s not too hard to find a way, and you’ll feel so good at the end of the month when you achieve it!
3. Declutter your finances
If you’re between jobs, unemployed or otherwise in a situation of lower income, it is a great opportunity to do a little audit of your finances. Making sure your accounts are in order and consolidating things will make you feel a lot better about your situation, and you might even find some money you didn’t know you had!
Since April, I’ve separated my checkings and savings, moved my emergency fun into a high yield savings account (which earns 80x the interest compared to my old savings account), closed an old account I used in college which had a couple hundred dollars in it, and emptied my Venmo balance. I also found some old bonds, rolled some coins and gathered all the cash I have on hand which I will be taking to the bank tomorrow. All in all, I have a much better picture of my finances now that I’ve taken note of all the places where my money is.
4. Jump at opportunities to increase your income
At the end of the day, increasing your income will be the only way to fix a hole in your budget. If you feel like you’re running out of money and fast, it’s time to start brainstorming ways to increase that income. I’ve talked a lot about how hard it is to do that in reality; however, my experience has shown that a consistent effort will most likely materialize into some type of income. Don’t get discouraged if you aren’t able to side hustle your way to $1000/month because even $100/month will do wonders for your budget!
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