If you are an independent contractor or are self-employed, it is especially difficult to make a budget and stick with it. Not due to any lack of discipline on your part but simply for the fact that you have sporadic income. You don't know if you will make enough to cover your monthly bills. So how can you go buy new living room furniture if you aren't even sure if you will make enough money this month? Even if you already have made enough, shouldn't you set aside in case NEXT month, you don't make enough? We get it. We completely understand how it is to live like that and it is one of the main reasons we made this budgeting app. We were not able to find something that would truly help us with an active plan. As we've already said, most budgeting app simply look backwards at how you did the past month and are not as active in managing day to day as we wanted it to be.
Setting Your Income Goals
Look back over the last few months, or even a year or two if you have been pretty consistent, and find your average lowest monthly income. You don’t want to find your WORST month ever, but when you have a slow month, what is usually your average income. You want to use that as a basis for your budgeting plan. Pick the frequency schedule of how often you want to manage your budget. For example, do you sit down to manage your business every week? Pick the weekly payment schedule and divide your low average monthly income by four. Enter what day of the week you want to sit and plan, like next Friday, and then your budget will calculate your income every 7 days. If you want to manage your bills every two weeks, pick the biweekly option and divide your low average monthly income by two. Again, pick the next day that you want to manage your plan and the budget will calculate your income every two weeks. We don’t recommend using twice per month because the 1st and the 15th always fall on different days of the week each month. Consistency is very helpful for budgeting and especially for independent contractors.
The rest of your setup should be just like everyone else's except maybe for savings.
Decide on Your Savings Goal
The amount you set aside in savings will be more important for you than for the average person since you do not have consistent income. You need to set aside for slow months and you typically need to set aside for taxes throughout the year. When you have a good month, take that opportunity to fill all of the envelopes for the next month and then send anything extra to savings. You will need to have a larger savings goal to reach before you start attacking your debt. Rather than $1,000 in savings as your first goal, we recommend at least one full months worth of expenses saved before you start attacking your debt.
Keep these things in mind when you get to the final screen of the onboarding which is entering your savings goal.