How I Design A Flexible Budget For Variable Income

If you are struggling to manage your money with a variable income, a flexible budget may be your secret weapon. 

Understanding A Flexible Budget

You can look at a flexible budget in terms of corporate finance or personal finance. A flexible budget requires cutting costs when the income is low and increases expenses and savings when the income is higher. 

Corporate Finance

Corporations alter their budgets based on varying costs and revenue. The budget comes out at the beginning of a fiscal year based on the amount of money the business has, its needs, and the expected revenue.

Personal finance and personal flexible budgeting are essential to millions of people around the world. Unlike corporate finance, where a budget comes out at the start of a fiscal year, personal finance requires managing a budget every month, because this is how billing cycles work. 

Personal Finance

Follow The Simple Steps Below To Create Your Flexible Budget:

- Add Up Your Fixed Spending - Calculate The Average Variable Expenses Per Month - Calculating Your Average Monthly Income - Remember To Include Savings - Pay Yourself - Separate Your Fixed And Variable Expenses

Advantages Of A Flexible Budget

- Avoid Overspending - Create Opportunities - Review Your Earnings - Plan Ahead

Disadvantages Of A Flexible Budget

The main disadvantage of a flexible budget is you may fall into unhealthy habits. For instance, if you create a static budget strategy (fixed and not flexible), you limit your spending to a given amount every month. 

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