List Your Monthly Expenses
How much do spend on a monthly basis? It is a little bit tough to calculate as it might fluctuate based on your needs. But, it is possible to track the expenditure on basic needs. So, what are basic expenses? It is very simple, the amount you spend on food, travel, health, and other daily basic necessities falls under your basic expenses. With this, you will be able to get an estimated idea of how much you spend on your basic need and budget accordingly by adding some extra amount for the same which should be around 5-10 percent more in the era of inflation and rising prices of goods of basic needs. The tax bracket on the income should also be kept in mind while making a budget.
How to Budget With an Irregular Income?
Budgeting is the biggest responsibility and so, it is the biggest challenge when you are earning irregular income.
Irregular income means that you don’t make the same sum of money every month. This can happen when you work as a freelancer or are employed as a gig worker. Simply, in other words, your income fluctuates each month due, and that is based on your work. This is a very tricky situation to handle, however, it is not impossible to tackle it if done mindfully.
If we go by numbers, as per a report by BCG, the gig economy holds the potential to serve up to 90 million jobs in the non-farm sectors of India and can add up to 1.25 percent to the country's overall GDP. Also, according to Velocity Global, the number of global gig workers is expected to rise from 43 million to 78 million in the year 2023. The report also suggests that over 16 percent of Americans have completed a job using an online gig platform.
With the growing trend of gig work, the situation of being caught with the situation of irregular income is becoming a common scenario that brings obstacles while we create a budget. Developed and developing countries are the major growing fields of the same. So, if you are in such a situation, how will you handle it? Well, you should follow the following ways of budgeting with an irregular income: