The Secret to Successful Budgeting of Income
If yours is like most households, you probably have months wherein more paychecks are received and other months wherein fewer paychecks are received.
This is normally due to weekly or biweekly pay periods, seasonal employment, seasonal profit margins, or year-end bonuses and profit sharing.
The key is to know ahead of time what your monthly spendable income will be for each of the next 12 months. In turn, this will make you aware of a very important number -- your lowest monthly income.
If possible, the goal should be to keep monthly expenditures lower than your lowest income month so that all income over and above that amount can be set aside for non-monthly bills and expenses.
Then, once you have sufficient funds set aside for non-monthly bills and expenses, you can apply other extra pay to a rapid debt reduction plan.
Imagine how great it would be to have funds readily available when irregular bills and expenses come due, and to be saving thousands of dollars in interest charges because you are paying your debts off ahead of schedule.