How to Budget Irregular Income

By 2 Cents on May 4th, 2010 | Category: Budgets | 5 comments

If I had a formula for bypassing trouble, I would not pass it round. Trouble creates a capacity to handle it. I don’t embrace trouble; that’s as bad as treating it as an enemy. But I do say meet it as a friend, for you’ll see a  lot of it and had better be on speaking terms with it.

~ Olliver Wendell Holmes

Update: Thanks to My Dollar Plan for including this article in the Carnival of Personal Finance #256 : Market Crash Edition.

If your income is commission-based or you are self-employed, you may find budgeting to be more of a challenge. We have lived on various types of irregular income for the past 10 years or so. It’s tempting to avoid budgeting altogether since you really don’t know what your income might be from one month or year [...]

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What If Your Budget Doesn't Balance?

By 2 Cents on April 15th, 2010 | Category: Budgets | 4 comments

One half of knowing what you want is knowing what you must give up before you get it.

~ Sidney Howard

Update: This article was featured in the Carnival of Money Stories posted at Buxr as well as the Festival of Frugality #226 posted at Beating Broke. Thanks!

I’ve written often about the importance of tracking your income and spending. Whether you want to call that a budget or something else is up to you. Whether you want to track every penny or just have a really good set of spending boundaries is up to you too.

In fact, your whole life is up to you, and you have a choice and a lot of say in how it turns out. Suppose you’ve finally had it with living pay cheque to pay cheque. You’re tired of being out [...]

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How to Make a Budget: My 2 Cents

By 2 Cents on January 20th, 2010 | Category: Budgets | Leave a comment

There is no one giant step that does it.  It’s a lot of little steps.

~ Peter A. Cohen

Update:  6 Remedies for a Debt Hangover is mentioned in today’s Money Hacks Carnival #100 @ The Ultimate Money Blog. Thanks Mrs. Money!

Over the past 2 years, I have had to rework our budget a half a dozen times or so, in addition to running various budget scenarios for potential job changes. So this stuff is pretty fresh for me. For what it’s worth, this post describes how I handle our budget. I don’t decide on percentage allocations up front. This might work for someone just starting out, but most of us have spending commitments that are well-entrenched. Rather, I start by looking at our net income and all of our expenses in detail.

Tools of the Trade

Quicken: I use [...]

Read on and enjoy … How to Make a Budget: My 2 Cents

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How to Make a Budget: Your One-Stop Shop

By 2 Cents on January 19th, 2010 | Category: Budgets | 6 comments

The first step towards getting somewhere is to decide that you are not going to stay where you are.

~ John Pierpont Morgan (Yep, it’s that J.P. Morgan)

Update: This post is included in the Money Hacks Carnival #102 at Passive Income Now. It’s also in the carnival Personal Finance: Third Edition. Thanks!

A lot of people hate the idea of budgeting. They say it’s too constraining. They need more flexibility. I’m not going to lie to you and say I love working on the budget. But I do love it when it’s done. And I love it when an expense pops up and I don’t have to get stressed out about it because our emergency fund covers it. I love it when my kids ask for something and I can tell them definitively whether or not we can afford it and [...]

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Your Budget: 5 Factors That Will Determine What It Looks Like

By 2 Cents on January 18th, 2010 | Category: Budgets | 8 comments

Success consists of going from failure to failure without loss of enthusiasm .

~ Winston Churchill

There is no single right way to make a budget. Like most other aspects of personal finance and life we just need to figure out how to make the one that works best for us. Usually, this will mean trying a bunch of different things before arriving at the one that suits us the most. The only thing that is certain is that we do need some type of budget. The key is not to give up after the first few tries. Persistence pays. Here are 5 factors to think about as you prepare your budget:

1.  Your Income Structure

The way in which money comes into your income statement is critical for planning cash flow. Here are some [...]

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Do You Need a Budget?

By 2 Cents on January 15th, 2010 | Category: Budgets | 3 comments

If you don’t know where you are going, you will probably end up somewhere else.

~ Lawrence J. Peter

Budget.  Just uttering the word can make people cringe, squirm, and head for the hills.  Even noted personal finance expert David Bachclaims that budgets don’t work.  Rather, he says that we should “toss out the budget and make it automatic” using his (I think originally David Chilton’s) pay yourself first principle. The idea is that you would decide to save, say 10% of your pay and just live on whatever is left over.

I have 2 issues here.  First, everybody needs some kind of budget. Second, even if you only pay yourself first, you are still practicing a form of budgeting, albeit a weak one.  Mr. Bach has some good ideas, but I have to disagree with him on this point.  Here are a few ways a budget – any [...]

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