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Question for the Money Doctors

Question submitted on Apr 3, 2011.


Dear Recipient:

I find this website and the site to be of great value in my personal financial planning. I was hoping you could help me with recommendations on 1) deciding on which type of budgeting template is the most commonly used, and two (even more importantly), with a career in sales my take-home pay ranges from $900 - $3,000 every two weeks. What is the best way to budget for this type of fluctuation without having to use credit cards on the slow weeks, and over-spending on the larger paycheck weeks?

Thanks so much for your advice,


Regarding which budgeting template to use, I wouldn''t get too caught up on which one to use just as long as you capture all of the various categories of expenses and you are tracking your expenses.  Tracking ALL of your expenses is the important thing.  Regarding your fluctuating income I would open a checking account and 1 savings account.  Place your net pay into the savings account.  Then have your monthly budgeted expenditure amount automatically transferred from the savings account to the checking account to spend/pay your bills.  By utilizing this type of structure, it should allow you to save the excess in any one month and also provide the additional income in months where your take home pay doesn't quite cover your budgeted expenditures.  As long as you are living within your means, the savings account should then grow creating an emergency fund for you.  Once you have an emergency fund (savings account) created of 3-6 months worth of living expenditures, you can then take the excess out of the savings account and start investing for the long-term in stocks and  bonds (likely via mutual funds).

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