How to budget for uncertain working patterns

Couple counting coins

With millions of workers unable to rely on regular hours or income, we look at ways to budget when faced with insecure work.

New figures from Citizens Advice Bureau (CAB) show that 4.5 million people are in insecure work, with no regular hours or income. These are usually freelancers or contract workers.This lack of stability can make planning a financial future difficult. But there are a few things you can do to make things easier…

Create a budget
No matter what your working situation – whether you’re a small business or freelancer working from home – you should have a budget in place. This can help you manage your incomings and outgoings more effectively.

If you’re faced with an insecure workflow, you might not be able to calculate your exact monthly income – but you’ll know your outgoings. Make sure you can account for every penny you spend.

The budget should show you where your limits are, so you can see at which point you’ll start to get into trouble financially. This point is basically when your basic income doesn’t cover your base spending.

Have an emergency fund
As part of any business plan, even if you’re just working alone, you should have some money saved as a back-up fund. If you hit your limits, you’ll need something to fall back on.

Close up of female accountant or banker making calculations

This fund should be there to stop you from having to take out expensive loans and to keep anyone you owe money to happy. This will also help you avoid expensive legal costs.

Shop around
If you’ve got your budget sorted, have a look at where you’re spending the most money. Then shop around for ways to reduce this spending.

It doesn’t cost to keep your options open. Make sure you’re always getting the best deal possible for everything from broadband to electricity bills. A monthly analysis of your outgoings will help spot worrying trends and overspends.

Go flexible
There are a number of services currently available that allow you to upscale when times are good, and cutback when the income flow drops.

Some mobile phone contracts can be adjusted monthly, while additional services like cloud computing can be tailored on a regular basis to meet your needs.

Look elsewhere
If you’re not getting the hours or income from your main role or business, look elsewhere for alternative sources of income. Ask yourself if there are other ways that you could be making money when you’ve got no hours scheduled in.

If you’ve been in this position for a while, create a diary of when you’re working – this could help you predict when the work will dry up, especially if your job is seasonal. You can then plan to do something else in these quiet months.

Pay your debts
Keeping on top of any debt is vital, as once you start getting behind in payments the fees and interest start adding up and you can find yourself trapped in a downward spiral.

If you’ve got a number of loans or debts, start by paying off the smallest first. Clearing a debt can help boost your credit score. It might also be worth consolidating them into a single debt – this will allow you to better see what you owe and you might even be able to get a lower interest rate.

Seek help
If things start to get out of hand, you can seek help and advice. CAB found that 83% of people with fluctuating work patterns sought its help when struggling with debt. Don’t be afraid to reach out to charities, or even friends and family, for financial and emotional support.


Posted by The Secret Businessman