mamalatte
9-1-11, 5:39pm
We have recently moved from living off a regular salary to a VERY irregular income, as in literally years with little or no $$$, punctuated by big sums (I am a lawyer working on contingency fee only in a very odd field).
I have found it very hard to budget. Previously (during the salaried days), my technique was basically to set a savings goal for each month. As long as I saved that much out of the incoming salary each month, I didn't really worry exactly what I was spending on (although I used past records of spending to figure out what my savings target should be).
With this new irregular income stream, we've been basically living off of savings for some time, and I find it really hard to keep expenses in check without that discipline of always saving some of what was coming in. I feel like we are spending more than we need to. And it seems hard to tell how the budget is going, when I'm just drawing off this big chunk of $$ month after month, hoping that another big chunk will come in before it's all gone, but not knowing for sure how long I need to make the $$ last.
I am thinking of moving to a more cash-based system and/or moving all $$ of out my checking account and then just paying myself a "salary" out of my "savings." But, if I do that, I'm not sure how I'd handle big one-time items like yearly taxes. Would I use the "savings" pile for the fixed, repeat costs and my fake "salary" for everything else? Anyone have any ideas?
I have found it very hard to budget. Previously (during the salaried days), my technique was basically to set a savings goal for each month. As long as I saved that much out of the incoming salary each month, I didn't really worry exactly what I was spending on (although I used past records of spending to figure out what my savings target should be).
With this new irregular income stream, we've been basically living off of savings for some time, and I find it really hard to keep expenses in check without that discipline of always saving some of what was coming in. I feel like we are spending more than we need to. And it seems hard to tell how the budget is going, when I'm just drawing off this big chunk of $$ month after month, hoping that another big chunk will come in before it's all gone, but not knowing for sure how long I need to make the $$ last.
I am thinking of moving to a more cash-based system and/or moving all $$ of out my checking account and then just paying myself a "salary" out of my "savings." But, if I do that, I'm not sure how I'd handle big one-time items like yearly taxes. Would I use the "savings" pile for the fixed, repeat costs and my fake "salary" for everything else? Anyone have any ideas?