How Can You Budget When Paychecks Are Unpredictable?

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Are you struggling to manage your finances because

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your paychecks are unpredictable?

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Do you find it hard to plan for the future when you don't know what

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your income will be next month?

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Well, today we're going to tackle this challenge head on.

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I'm going to share seven practical and useful tips to

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help you budget effectively, even when your income fluctuates.

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And here's my promise by the end of this episode, you're going to feel

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empowered to take control of your finances and find peace of mind.

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So let's get started.

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Well, thank you for joining me today on the ask Ralph show.

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I'm your financial evangelist and I'm thrilled you're here.

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I know you're taking valuable time out of your day to be with me and

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I promise I'm going to make an impact on you with today's topic.

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My goal here is all about helping you escape that cycle of financial

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shame and do it with confidence.

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So today we're discussing a crucial topic and that's how can you budget.

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When paychecks are unpredictable, many of you are dealing with fluctuating incomes,

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which can cause stress and uncertainty.

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Whether you're in seasonal employment, if you're self employed or part of the

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gig economy, managing your finances can feel like a navigation of a storm.

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But I'm here to tell you that there's hope.

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And here's the hope.

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By the end of this episode, you're going to have practical tips to

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manage your money effectively, align your spending with your values.

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And find financial peace.

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So stay engaged because I'll be sharing some key takeaways that will

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make a real difference in your life.

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Now, yesterday we talked about whether cheap advice is really worth the price.

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The key takeaway was understanding the value of quality financial

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advice and how it can save you money and stress in the long run.

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So if you missed it, you can catch up at ask Ralph.

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com.

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That's where we keep.

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All of our episodes and

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today's topic comes from a listener named Craig and Craig writes

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this Ralph, I'm at my wits end.

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I'm struggling to budget because my income is so unpredictable.

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Some months I make enough to cover all my bills, but other months I fall short.

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This inconsistency is causing me a lot of stress.

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I feel like I'm constantly walking on a financial tightrope, never knowing

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if I'll make it to the other side.

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Every time I think I have a handle on my finances, another unexpected expense

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or a lean month throws me off balance.

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It's like trying to build a house on quicksand.

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Just when you think you've laid a solid foundation, it all starts sinking again.

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The uncertainty is weighing heavily on me.

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I find myself lying awake at night, worrying about how I'll

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pay the next bill or what will happen if an emergency comes up.

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It's affecting my health.

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It's affecting my relationships and my peace of mind.

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I feel like I'm drowning in uncertainty and I need some guidance.

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I've tried tracking my expenses, but it feels like a never ending battle.

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I've cut back on non essentials, but it's hard to plan for the future when I don't

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know what my income will be next month.

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I feel like I'm stuck in a cycle of financial stress and

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I don't know how to break free.

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Ralph, please, I need your help.

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How can I create a budget that works for me despite the fluctuations in my income?

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I'm desperate for some stability and a way to manage my finances without

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this constant fear and anxiety.

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Any advice you can give would be greatly appreciated.

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Well, Craig, what a great question, and thank you so much for your question.

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And I know how challenging it can be to budget with unpredictable income.

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The uncertainty can cause a lot of stress, it can cause a lot of anxiety, and it

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makes it hard to plan for the future.

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I've worked with many clients in similar situations, and I've seen

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firsthand how difficult it can be.

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But I want to start by letting you know that there is hope, and today

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I'm going to provide you with some concrete action steps to help you

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manage your finances effectively and in Even when your income fluctuates and

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just remember this, you're not alone in this and together, we're going to

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find a solution that works for you.

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Remember, if you've got a question you'd like answered, just like

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Craig, you can go to just ask Ralph.

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com because here's the truth.

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I love answering your questions.

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And it's the central part of the show.

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It's my goal to help you find the answers that you need.

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Well, let's get started by taking a look at the word for today's Bible verse.

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And today's verse comes from the book of Philippians chapter four, verse 19.

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And it says this, and my God will supply every need of yours, according

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to his riches in glory in Christ Jesus.

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What a beautiful verse.

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What a great way to remember that the Lord is going to provide for.

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Every one of our needs.

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And this verse ultimately reminds us that God is our provider.

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He knows our needs.

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Listen, he knows our needs before we know our needs and he will

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supply them according to his riches.

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And he has those riches and this verse gives us confidence, Craig.

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I hope you hear that.

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It gives us.

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Peace knowing that even in times of uncertainty and Craig, I feel

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that you've got that uncertainty.

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So even in times of uncertainty, God is in control and I am truly grateful

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for the opportunity to help people just like you, Craig, I've seen how financial

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uncertainty can weigh heavily on people.

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And I'm thankful that the Lord has given me the experiences and I've been doing

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this for 30 years and understanding to help others navigate these challenges

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from a place of faith because that is really the key and it is a privilege

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to be able to share this knowledge and provide hope and practical solutions.

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So let's get right to it and let's get into the details of today's show.

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Craig, let me start by sharing a personal story.

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Many years ago I worked with a client, we'll call her Fiona.

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Now, Fiona was a freelance graphic designer.

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And her income definitely fluctuated from month to month.

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Some months she would have plenty of work and make a good income,

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but other months were lean and she struggled to make ends meet.

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Fiona was constantly stressed about her finances and it was affecting her health.

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It was affecting her relationships.

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So one day Fiona broke down.

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She came to me for a consultation and she was truly desperate for help.

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She felt like she was drowning in uncertainty and she just didn't know

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how to manage her money effectively.

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And this was really challenging for her with her fluctuating income.

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So what do we do?

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We started by tracking all of her income and expenses meticulously.

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And when we did that, Fiona was surprised to see how much she was spending

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on non essentials during those good months, you know, the months when she

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had the money flowing in, which left her short during those lean months.

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And listen.

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I don't know about you, Craig, but this is easy to do.

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I've experienced this myself, this urge to, you know, to, to when

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you have a really good month to, to go out and spend and spend.

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So it's not all too uncommon.

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So the next thing we do is you created a budget based on her lowest income month.

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And listen, I'm going to.

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Talk about all of these steps today.

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I just wanted to kind of share this story with you because it was really a way

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to encapsulate what we're able to do.

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So the first thing we did, we created a budget.

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We looked at her lowest income month first, that way we ensure

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that her essential expenses were always going to be covered now.

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Call this the baseline budget plan, something that would

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meet at least her basic needs.

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And then what we did was any extra income she received during those

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quote better months or those fat months was allocated to savings.

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We allocated that to debt reduction and we gave her some ability to do some

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discretionary spending because listen, she was the one making the money.

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She was out there slaying the dragons.

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She was making it happen.

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But we needed to figure out a way that she could handle those lean months.

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At the same time, Fiona set up an emergency fund, and this

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is one of the big things that we're going to talk about today.

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She, she set up that emergency fund to provide a financial buffer.

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And that financial buffer is going to be essential.

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When you have those months where the income dips, the next thing we did was

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we prioritize her essential expenses.

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Those were her giving and savings.

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And then we really looked at a debt plan to help her manage her debt wisely.

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And in the end, Fiona's transformation was remarkable.

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I had loved watching this.

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I love watching when my clients and people that I work with have that aha

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moment and they really start to click.

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And when Fiona, it was, like I said, was remarkable.

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She no longer felt like she was drowning in uncertainty.

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Fiona had a clear plan and she was able to manage her finances effectively.

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Even with those fluctuations in her income and the beautiful part of this, Fiona's

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stress levels decreased and she was able to focus on her work and she was a

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very creative person and she was able to focus on her relationships with others.

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And that's the beauty of having all of these things in order without

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the constant worry about money.

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So Craig, you might be saying, okay, that sounds good for Fiona, but what about me?

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Well, Craig, you too can overcome this situation.

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So today I'm going to share seven practical and useful tips to

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help you budget effectively, even with an unpredictable income.

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So let's jump right into it.

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Tip one, lay your foundation on faith, seek God's wisdom and guidance.

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You know, I always like to start here before implementing

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any financial strategy.

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It's vital to turn to God in prayer, ask for discernment and ask for

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direction in managing the resources.

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He's entrusted to you.

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That's where we need to start.

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This act of seeking divine guidance establishes a firm

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foundation for financial decision making rooting it in faith.

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And I think that's the key.

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That's what I talk about on the show every day.

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rooting it in faith rather than solely on human understanding.

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I've, I've said many times on the show that I can teach you to

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be a very wealthy scoundrel, but it's not going to be longterm.

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It's not going to give you that character because here's the truth.

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Christian financial stewardship.

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Is deeply intertwined with biblical principles that offer

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timeless wisdom for handling money.

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I'm going to talk about a couple of those right now, trusting in God's

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provision, as we highlighted in Philippians 419, Proverbs 3, 9 and 10,

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I'm going to encourage you to read this.

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They remind us that ultimately.

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And this is the truth.

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God is the source of all blessings, and we need to cultivate contentment.

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We talked about that before in the show.

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Look at Hebrews 13, five and first Timothy six, six.

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It helps us to guard against the allure of materialism and that.

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Endless pursuit of money.

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Now, I don't have time to discuss each of these verses today, but

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it's really important that you start to cultivate that contentment.

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And if you start off with prayer, if you start off with taking it

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to God, you're going to help get yourself there in a better way.

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It's all about that mindset.

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Furthermore, the principle of generosity, it's emphasizing.

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Second Corinthians chapter nine, verses seven and eight and first Timothy six 18.

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And I'm going to encourage you to read all of those verses.

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I'll put those in the show notes.

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She can go back and check them out, but all of these verses underscores

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the importance of giving back to God and supporting others,

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regardless of one's financial state.

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See, I think that first tip.

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Is all about getting yourself in the right mindset.

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And it all starts with that prayer.

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And it's all starts with acknowledging it.

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Listen, it's not mine to begin with.

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And I've got to figure out how the Lord would want me to steward these resources.

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So that's tip number one, tip number two.

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This one is absolutely crucial.

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Whenever I work with anybody, I always start here.

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So tip number two is know your financial flow, track your

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income and expenses diligently.

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So Craig, a fundamental step in managing finances, especially

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with an unpredictable income.

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And I almost feel like this is even more important when you have that unpredictable

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income is to meticulously track all of your sources of income and every single.

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Expense.

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You know, I say it on the show all the time.

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What gets measured gets done.

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Gaining a clear picture of where your money's coming from and

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where it's going is essential for identifying those financial patterns

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and calculating averages, which are crucial for effective budgeting,

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especially when you have uneven income.

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See, without this detailed information, creating a realistic and workable budget

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becomes significantly more challenging.

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Now, there are various methods that can be employed for tracking financial

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flow, and it depends on your preferences and your technological comfort levels.

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And see, budgeting and saving apps offer some automated tracking and

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categorization of expenses, and those things can provide you with some real.

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Time insights.

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Other people like spreadsheets that offer a customizable option for those

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who prefer a more hands on approach to organizing their financial data.

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I've got many clients that they have those pivot tables.

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They have those spreadsheets.

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They keep track of everything.

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And when they come in to meet with me, whether it's be monthly or

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quarterly at the end of the year, they've got this great spreadsheet

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because they're engaged in that.

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Now you might be one of these people that just wants to make it

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simple so you don't have to build this massive elaborate thing.

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So even with traditional paper and pen, you can be effective.

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Here's the key.

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The key is to choose a method that is sustainable, something you're

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going to use and will consistently.

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make you record all of your financial transactions.

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An important aspect of tracking this is the ability to distinguish

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between needs and wants.

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And we really need to park here for just a second, financial needs.

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Are those expenditures essential for living and working such as

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your housing, your, your food, your utilities, and transportation.

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Those are things that are must, and they're going to

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be at the top of your budget.

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So even in those lean months, you're still going to have to be able to.

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Sustaining yourself for housing, for food, for utilities and transportation.

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Now, once on the other hand, are those expenses that enhance comfort and leisure?

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Those are the things that we talked about with, with Fiona, when she

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had those great, you know, great months, she landed that new contract.

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Those are the times when you splurge a little bit, but they're not

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strictly necessary for survival.

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There also can be a gray area.

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Now I'm talking about for a second, the gray area are those that are

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important, but not absolute needs.

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And you've got to understand this distinction.

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It's vital for making informed decisions about spending, especially

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during periods of lower income.

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When prioritizing essential expenses becomes critical.

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If you've got those months where your income is a lot lower, you

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better be crystal clear on the things that are needs versus wants.

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And if you think about it, this is a Christian show.

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This aligns perfectly with the Christian principle of prioritizing contentment

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over excessive material consumption.

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So basically what I'm saying is you've got to learn to be content

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with your needs being met and not focus so much on those wants.

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So that's tip number two.

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Let's move on to tip number three, and that is chart your course.

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Choose a budgeting method that fits your flow.

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And that's really important.

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Craig, several budgeting methods can be adapted to manage an unpredictable income.

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Each has its own set of advantages and consideration.

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Let's talk about a couple of those.

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There is budgeting based on the lowest income month, where that involves creating

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a budget using the minimum amount of income typically earned in a month.

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This is a very conservative approach, but it ensures that essential expenses

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are covered even during those lean times.

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It provides a strong safety net and reduces financial anxiety.

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And then what you do is any extra income received during those

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quote better months can then be confidently allocated to savings.

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We can allocate those to debt reduction or then put them into discretionary spending.

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That's what I did with Fiona and she found to be very effective.

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Another approach is budgeting using average monthly income.

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This method involves calculating the average income over a period, for example,

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six months or over a year to create a more consistent baseline for planning.

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Now, this approach can smooth out income fluctuations, but here's

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the thing you need to understand.

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If you're going to use this average approach, it's going to require

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discipline to save during those higher income months to offset potential

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shortfalls in lower income months.

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Now, comparing the average income with the lowest earning month can provide a

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clearer understanding of the income range.

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We also can do what's called zero based budgeting.

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That's a method where every dollar of income is assigned a specific

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purpose, whether it's for expenses for savings or debt repayment,

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resulting in a net zero balances.

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Now for those with variable income, and that's really what

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we're talking about today.

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This often involves planning the budget based on the lowest.

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Expected monthly income and then allocating any extra income received

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to savings or to future expenses.

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And this method offers a high degree of control because it promotes

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intentional spending and saving habits.

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Another option is what's called the envelope system, where you allocate a

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certain amount of money to each envelope.

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That's basically your spending categories.

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That's something that my grandparents used to do, and it's

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something that you could use.

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Now this, I don't know about how effective that would be when you have this variable

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income, but the general principle of setting spending limits for categories

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can be adapted to adjust to those amounts.

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Allocated envelopes based on income received now, and

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there's paper versions of that.

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I mean, you literally go to the store and get some envelopes

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and write what they are on.

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There's digital versions of this, and this can be particularly effective for

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controlling discretionary spending.

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There's also something called percentage based budgeting, and that involves

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allocating a fixed percentage of each income payment to different

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spending and savings categories.

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Now this method is inherently flexible as the amounts in each

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category just automatically with.

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Income fluctuations, making it well suited for unpredictable earnings.

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So for example, what I'm talking about here is where you could apply like,

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and I've talked about this on the show before that 50, 30, 20 rule, 50

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percent for needs 30 percent for once 20 percent for savings and debt repayment.

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And this is a common example of way people do this.

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And one of the reasons I like this for fluctuating income is

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it's real easy to take a look at this and say, okay, well, great.

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50 percent of my income this month needs to go to needs.

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30 percent needs to go to once and 20 percent needs to go to

Ralph:00:18:30

savings and debt repayment.

Ralph:00:18:31

The flaw in this, in my view, is what happens if your essential expenses

Ralph:00:18:37

are greater than that 50 percent and then you've got a problem.

Ralph:00:18:39

So I don't necessarily like this, but I wanted to share this as something that we

Ralph:00:18:43

could talk about here on the show today.

Ralph:00:18:45

There's also the profit first method, and that offers another percentage

Ralph:00:18:49

based approach, particularly for business owners and freelancers.

Ralph:00:18:52

And it's primarily used in organizational finance.

Ralph:00:18:55

And it's a concept of priority based budgeting can be adapted for personal

Ralph:00:18:59

use by those with variable income.

Ralph:00:19:01

And this involves ranking expenses based on their importance and

Ralph:00:19:05

their alignment to one's values and then allocating funds accordingly.

Ralph:00:19:09

I think this is a great thing for Christian households to do,

Ralph:00:19:12

but this would mean prioritizing essential needs, giving and savings.

Ralph:00:19:16

Now we covered a lot of budgeting things there.

Ralph:00:19:19

My big takeaway on the budgeting section of this is find what works for you.

Ralph:00:19:23

I truly believe that it depends on your situation.

Ralph:00:19:26

If you've got a lot of fluctuation up and down every month, I think you may

Ralph:00:19:31

need to use an approach that really looks at that needs versus wants.

Ralph:00:19:35

Well, let's move on to tip number four, and that's what I'm going

Ralph:00:19:37

to call prioritize with a purpose.

Ralph:00:19:40

One of the things you've got to do if you're in this type of situation where

Ralph:00:19:44

your income goes up and down, and I've mentioned this a couple of times now,

Ralph:00:19:48

you've got to focus on the essentials.

Ralph:00:19:50

You got to focus on giving savings and wise debt management, Craig, regardless.

Ralph:00:19:56

Of which budget method you choose prioritizing expenses according to their

Ralph:00:20:00

importance is an alignment with your Christian faith, and it's an alignment

Ralph:00:20:05

with Christian values, essential expenses such as housing, food, utilities,

Ralph:00:20:10

transportation, and healthcare.

Ralph:00:20:12

Always got to be at the top of your priority list because you've got to ensure

Ralph:00:20:17

that these fundamental needs are met because that's going to give you a sense

Ralph:00:20:21

of security and it's going to help you reflect your biblical responsibility to

Ralph:00:20:25

care for yourself and for your family.

Ralph:00:20:28

Now, you know, just, I mentioned giving or tithing.

Ralph:00:20:31

That's a really core principle of Christian financial stewardship,

Ralph:00:20:34

and that's got to be prioritized within the budget as well, even

Ralph:00:20:38

with an unpredictable income.

Ralph:00:20:40

Now, many Christians, and I deal with people every day that say this

Ralph:00:20:42

to me, many Christians aim to give a percentage of their income because

Ralph:00:20:46

they debt They believe demonstrates trust in God's provision, and it's

Ralph:00:20:51

all about supporting the work of the church and their ministries.

Ralph:00:20:54

And that act of giving is an expression of worship and obedience.

Ralph:00:20:58

So I think that we need to start there.

Ralph:00:21:00

So we're going to meet our, our absolute needs.

Ralph:00:21:03

Then we're going to talk about giving, and then we need to talk about savings because

Ralph:00:21:06

savings is also paramount importance.

Ralph:00:21:09

Especially when your income is variable, because you may need to tap into that

Ralph:00:21:14

if you've got one of those low months.

Ralph:00:21:15

And that's why we talk about building that emergency fund, because that emergency

Ralph:00:21:19

fund is going to help cushion against these unexpected income dips or expenses,

Ralph:00:21:24

as well as saving for future financial goals and see savings provides financial

Ralph:00:21:29

security and aligns with biblical wisdom of preparing for the future.

Ralph:00:21:34

And finally managing debt.

Ralph:00:21:35

So one of the things that you definitely have to focus in on is managing your

Ralph:00:21:40

debt, because that's going to help you break free from that bondage, managing

Ralph:00:21:44

debt wisely and avoiding unnecessary debt is crucial for financial freedom.

Ralph:00:21:49

Here's the truth.

Ralph:00:21:50

High interest debt can be particularly burdensome and

Ralph:00:21:53

limit financial flexibility.

Ralph:00:21:55

So you've got to prioritize the repayment of those debts and

Ralph:00:21:59

avoid future unnecessary borrowing because that can significantly

Ralph:00:22:03

improve your financial well being.

Ralph:00:22:05

Especially when income fluctuates.

Ralph:00:22:07

And I dare say that's one of the most important things.

Ralph:00:22:10

If you're carrying a big debt burden, you're going to have

Ralph:00:22:13

more what I'll call fixed costs.

Ralph:00:22:15

It's a fancy accounting term, but you're going to have more fixed costs that

Ralph:00:22:18

have to be met because, Hey, it doesn't matter whether you got the income or not.

Ralph:00:22:22

You've got the debts, you've got to make these payments.

Ralph:00:22:25

So one of the things that I'm going to encourage you, Craig and everyone else

Ralph:00:22:28

listening is to have a debt repayment.

Ralph:00:22:31

It is far easier to manage fluctuating income if you're not

Ralph:00:22:36

trying to service a lot of debt.

Ralph:00:22:38

Well, let's move on to tip number five and that's what I'm going to call build your

Ralph:00:22:41

arc. This is where you create an emergency fund for financial storms and listen.

Ralph:00:22:45

If you're like me, you've been through financial storms.

Ralph:00:22:48

We all have those.

Ralph:00:22:50

So Craig for individuals with unpredictable income and emergency

Ralph:00:22:54

fund is not just a good idea.

Ralph:00:22:56

It's a critical necessity.

Ralph:00:22:58

It acts as what we'll call the financial arc during times of income

Ralph:00:23:02

scarcity or unexpected expenses.

Ralph:00:23:05

Knowing that there are funds set aside to cover essential expenses

Ralph:00:23:09

during those income dips can significantly reduce stress and anxiety.

Ralph:00:23:14

So I'm going to encourage you.

Ralph:00:23:15

And listen, I know building an emergency fund can seem

Ralph:00:23:18

daunting, but it can be achieved.

Ralph:00:23:21

If you make it consistent, I always talk about this all

Ralph:00:23:23

the time is start the process.

Ralph:00:23:25

And have some strategic savings setting aside, even a small portion of every

Ralph:00:23:30

paycheck, or if you're in the gig economy, every income piece that you

Ralph:00:23:33

earn, regardless of the amount, we'll help you come accumulate this over time.

Ralph:00:23:39

And then during months with higher than average earnings, you know,

Ralph:00:23:42

you can allocate a larger portion of that to that emergency fund, and

Ralph:00:23:45

that can truly accelerate its growth.

Ralph:00:23:48

One of the things that I recommend on the show all the time is Automating

Ralph:00:23:52

those savings transfers, because that can help you ensure consistency.

Ralph:00:23:55

I have many clients that just automatically, whenever they get paid,

Ralph:00:23:58

a certain amount goes to tithing, a certain amount goes to savings, a

Ralph:00:24:02

certain amount goes to debt, reduction.

Ralph:00:24:04

All those things are important, but see starting small and gradually

Ralph:00:24:08

increasing the amount saved.

Ralph:00:24:10

If.

Ralph:00:24:10

Is often more sustainable.

Ralph:00:24:12

A lot of people can't just start off with, Hey, Ralph, you said

Ralph:00:24:14

I need three to six months.

Ralph:00:24:15

I'm gonna talk about that in a second, but consider just growing it slowly.

Ralph:00:24:20

Maybe you want to consider selling unused items or allocating unexpected income.

Ralph:00:24:24

Like maybe you get a tax refund.

Ralph:00:24:26

It's that type of time of the year with tax season, maybe you get

Ralph:00:24:29

that refund and you use that to start seeding that emergency fund.

Ralph:00:24:33

And that way you can start to build that.

Ralph:00:24:35

Now your overall goal for an emergency fund, and a lot of people get scared

Ralph:00:24:40

when I say this is three to six months worth of essential living expenses.

Ralph:00:24:44

And listen, if you work in the gig economy or if you have fluctuating income,

Ralph:00:24:49

I'm going to say something very bold.

Ralph:00:24:51

I think that your main focus.

Ralph:00:24:53

needs to be to build that emergency fund.

Ralph:00:24:55

I would even dare say, even before you worry about so much about doing

Ralph:00:25:00

that, saving, uh, you know, putting the money aside for retirement or

Ralph:00:25:03

extinguishing that debt, you got to have that emergency fund because it's going

Ralph:00:25:07

to help you smooth out those type of things is what I'm going to talk about.

Ralph:00:25:10

Tip number six here in a second.

Ralph:00:25:12

And it's going to take time to achieve it.

Ralph:00:25:14

But even a small emergency fund can provide a crucial buffer against

Ralph:00:25:19

those unexpected financial challenges.

Ralph:00:25:21

let's move on to tip number six.

Ralph:00:25:23

And that's exactly what I was talking about.

Ralph:00:25:24

Those things that happen.

Ralph:00:25:26

We're going to say, prepare for the seasons.

Ralph:00:25:28

You Craig, you've got to prepare for irregular income and expenses.

Ralph:00:25:33

See, here's the thing, predictable fluctuations in income and

Ralph:00:25:36

expenses are often a reality.

Ralph:00:25:38

Hey, listen, they're a reality for everybody, but they are definitely a

Ralph:00:25:41

reality for those with variable income, because you might not land that client.

Ralph:00:25:45

You might not book those gigs this month.

Ralph:00:25:47

And if you can anticipate these seasons, it is going to

Ralph:00:25:51

be key to effective budgeting.

Ralph:00:25:54

Let's say you're an individual that works seasonal.

Ralph:00:25:56

You may have predictable periods of higher income, and then you'll

Ralph:00:25:59

have those lower income times.

Ralph:00:26:00

A lot of my clients that work in outdoor, like landscaping or, or lawn

Ralph:00:26:04

maintenance, they have those situations.

Ralph:00:26:07

They are very seasonal.

Ralph:00:26:09

And then similarly, expenses like the holidays.

Ralph:00:26:11

So it's both an income side and an expense side.

Ralph:00:26:14

So expenses like the holidays, back to school costs and

Ralph:00:26:17

annual bills occur regularly.

Ralph:00:26:19

Another thing you can consider doing is setting up what's called a sinking funder.

Ralph:00:26:22

That's what we call a dedicated savings account.

Ralph:00:26:25

Talk about these on the show a few times where you can anticipate

Ralph:00:26:28

those larger expenses and help manage them more effectively.

Ralph:00:26:32

And if you allocate a small amount each month, a lot of people that I've worked

Ralph:00:26:35

with, I remember back in my credit union days, they had the Christmas fund and

Ralph:00:26:39

every month they would put a certain amount aside because they knew come

Ralph:00:26:42

October or November, they needed that money to do the Christmas stuff and

Ralph:00:26:47

see by allocating a small amount each month towards these future expenses.

Ralph:00:26:51

The financial burdens is spread out over time and that makes it

Ralph:00:26:54

more manageable when they arise.

Ralph:00:26:56

So for example, setting aside a monthly amount for the holiday gifts,

Ralph:00:26:59

like I talked about, or maybe you've got an annual car insurance premium.

Ralph:00:27:03

This can help you prevent that significant financial strain

Ralph:00:27:07

when these expenses are due.

Ralph:00:27:08

I have a lot of clients, a lot of my retired clients actually do

Ralph:00:27:12

what I'll call the sinking fund.

Ralph:00:27:13

They basically create an accounting system for themselves and it

Ralph:00:27:16

doesn't have to be elaborate, but they say, you know, every month.

Ralph:00:27:19

I'm going to put them aside this month or this much for my insurance, because

Ralph:00:27:22

that's going to come due in October.

Ralph:00:27:24

A lot of people like in Delaware, for example, our property taxes are

Ralph:00:27:27

due in September 1st of October.

Ralph:00:27:30

So a lot of people will do is they'll start to put that money aside.

Ralph:00:27:33

It's kind of the same idea.

Ralph:00:27:34

If you've got a mortgage with an escrow, that's exactly what an escrow is.

Ralph:00:27:38

The mortgage company is putting that side, that income aside, or that

Ralph:00:27:42

expense aside Every month so that when it comes to time to pay it, you got

Ralph:00:27:46

the money to do it and see given the unpredictable nature of income, it's

Ralph:00:27:50

essential to review and adjust the budget each month based on the actual income

Ralph:00:27:56

received and any upcoming note expenses.

Ralph:00:27:59

That's one of the things about this seasonality.

Ralph:00:28:01

It's unpredictable.

Ralph:00:28:02

So you've got to be willing to review and adjust your budget each month

Ralph:00:28:07

based on what's really going on.

Ralph:00:28:08

And see, that's a lot of people get stuck on that.

Ralph:00:28:10

They think they're going to create this budget and this budget is going

Ralph:00:28:13

to be, you know, two stone tablets are going to have the hammer and chisel.

Ralph:00:28:17

But that's not what a budget supposed to be.

Ralph:00:28:19

A budget should be a dynamic tool that adapts, to your

Ralph:00:28:23

changing financial circumstances.

Ralph:00:28:25

And if you review it, it allows you to make those necessary adjustments

Ralph:00:28:30

to your spending And savings plans.

Ralph:00:28:33

Let's move on to tip number seven, and that's embrace contentment and seek

Ralph:00:28:36

community, finding peace and support in God's provision, Craig cultivating

Ralph:00:28:41

contentment is a vital aspect of Christian financial stewardship, especially when

Ralph:00:28:47

you're dealing with income variability.

Ralph:00:28:49

There's this temptation to compare yourself to others or to constantly

Ralph:00:28:53

strive for more and more and more, and that can lead to dissatisfaction

Ralph:00:28:57

and it can lead to overspending.

Ralph:00:28:59

I talk about this on the show all the time, focusing on gratitude for

Ralph:00:29:03

what God has provided and trusting in his plan can bring a sense of.

Ralph:00:29:07

Peace that transcends these financial circumstances.

Ralph:00:29:11

One of the ways you can do that is seek support and accountability

Ralph:00:29:14

from trusted Christian friends.

Ralph:00:29:16

Maybe you have family members or some financial mentors that can provide

Ralph:00:29:20

you valuable encouragement and practical advice because it's not easy.

Ralph:00:29:24

You'll listen to me on this.

Ralph:00:29:25

It's not easy to budget when your income fluctuates.

Ralph:00:29:29

So sharing financial challenges and goals within a supportive

Ralph:00:29:33

community can make the journey less.

Ralph:00:29:35

Isolating.

Ralph:00:29:36

And it can offer different perspectives.

Ralph:00:29:38

There may be someone else who has been through that same

Ralph:00:29:41

situation that you're in Craig.

Ralph:00:29:42

They understand what you're going through, utilizing available Christian

Ralph:00:29:46

resources, such as books, websites, Hey, podcasts, just like this one.

Ralph:00:29:51

They can provide ongoing learning and guidance tailored

Ralph:00:29:55

to a faith based perspective.

Ralph:00:29:57

And if you're listening to me.

Ralph:00:29:58

I imagine that that's important to you and these resources can offer

Ralph:00:30:02

insights and principles that align with Christian values and help you navigate

Ralph:00:30:08

your finances in a way that honors God.

Ralph:00:30:11

Well, now let's get to our reflection questions.

Ralph:00:30:13

We have covered a great deal today, and I just want to park here for a minute.

Ralph:00:30:17

And let's reflect on what we've talked about.

Ralph:00:30:20

So let's start off with number one.

Ralph:00:30:21

How can seeking God's wisdom and guidance help you in managing your finances,

Ralph:00:30:27

especially with an unpredictable income?

Ralph:00:30:29

Think about it a little bit.

Ralph:00:30:30

What are the things that we talked about today?

Ralph:00:30:33

What are the things that you didn't even think about?

Ralph:00:30:34

Are you going to start with prayer?

Ralph:00:30:36

Are you really going to focus on tracking expenses?

Ralph:00:30:39

Are you going to work on that budget?

Ralph:00:30:41

Are you going to find Christian mentors?

Ralph:00:30:43

Are you going to build that community?

Ralph:00:30:45

What are those things that you're going to start with today to

Ralph:00:30:48

help you manage your finances?

Ralph:00:30:50

Second step, what steps can you take to track your income and expenses diligently?

Ralph:00:30:55

And why is this important for effective budgeting?

Ralph:00:30:58

Think about that.

Ralph:00:30:59

What are the steps that you can take today?

Ralph:00:31:01

Not tomorrow, not next week.

Ralph:00:31:02

What can you today, if you're listening to this, The title caught your eye.

Ralph:00:31:07

You're thinking about, yeah, you know what, Ralph, this appeals to me.

Ralph:00:31:09

This, this applies to me.

Ralph:00:31:11

Maybe you heard Craig's listener question.

Ralph:00:31:13

You're like, man, Craig, it's like, you're talking directly to me.

Ralph:00:31:16

Well, what steps can you take to track your income diligently that will help you

Ralph:00:31:20

get to that effective budget to reduce that stress, to reduce that anxiety, and

Ralph:00:31:26

then think about which budgeting method do you think would work best for you?

Ralph:00:31:29

Depends on your situation.

Ralph:00:31:31

Look at your income variability and then discuss or think about

Ralph:00:31:34

why that one would work for you.

Ralph:00:31:36

So those are my reflection questions.

Ralph:00:31:38

if you found today's episode helpful, or if anyone else is listening and you

Ralph:00:31:42

found it helpful, I want to encourage you to subscribe to our newsletter.

Ralph:00:31:45

You can do this by going to ask Ralph podcast.

Ralph:00:31:48

com slash newsletter.

Ralph:00:31:49

Listen, our newsletter is packed with valuable information.

Ralph:00:31:52

It's packed with tips and resources to help you on your financial journey.

Ralph:00:31:56

And by subscribing, you'll stay informed and empowered to make

Ralph:00:32:00

the best financial decisions.

Ralph:00:32:02

And that's what it's all about.

Ralph:00:32:03

You can get to that by going to ask Ralph podcast.

Ralph:00:32:06

com slash newsletter.

Ralph:00:32:08

Again, I'll put that in the show notes, but it's ask Ralph podcast.

Ralph:00:32:12

com slash newsletter.

Ralph:00:32:14

Now, tomorrow we're going to be discussing an important topic,

Ralph:00:32:16

and that's five important things that disappear when you retire.

Ralph:00:32:20

Are you ready?

Ralph:00:32:21

And it's not your waistline and hopefully it's not all your money.

Ralph:00:32:24

So make sure to join me again tomorrow for another insightful episode

Ralph:00:32:28

about what five important things that disappear when you retire.

Ralph:00:32:32

And are you ready to do them?

Ralph:00:32:33

It is going to be a game changer.

Ralph:00:32:36

Well, thank you, Craig, for your questions and for your time today.

Ralph:00:32:39

Remember my passion is to help you achieve financial success.

Ralph:00:32:42

I want to see you live out your dreams and I want to see you grow in your faith.

Ralph:00:32:45

And I know together we can master your finances from a Christian perspective.

Ralph:00:32:50

So as I always end the show, stay financially savvy out there

Ralph:00:32:53

and God bless you abundantly.