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Relax Between Paychecks

Those who work as contractors, small-business owners, freelancers, or "just when I feel like it" aren't eyeballing the employment figures in the Sunday business section. They're too busy trying to make a living.

When you are The Boss Man, the role of chief financial officer is critical to your everyday well-being. In the world of the self-employed, it's usually feast or famine. And unfortunately for many, it's a guessing game when it comes to anticipating the next month's income.

If your paycheck is irregular, planning and budgeting are just as important as soliciting work, says debt counseling firm Money Management International. Here are some practical tips on keeping the cash flowing:

Average out your expenditures over a three-month period. If you're not tracking your expenses now, do it for a few months. Don't forget to include the monthly costs of health-care premiums, taxes, and office supplies. Knowing where your money really goes will help head off any end-of-the-month surprises.

Free up your cash flow by regulating your expenses. Many utility companies offer balanced billing options so that horrendous winter heating bill is spread out evenly over the year. Go for the monthly payment on auto insurance -- but only if there is no extra charge to do so.

Build a safety net for lean months. Start socking money away in a short-term savings account today. Whether it is three or six months of living expenses depends on your situation. If you have dependents, the more savings the better. Even if you can only put a minimum amount in, it's better than relying on Mr. Visa when money gets tight.

Though credit lines are tempting, avoid relying on them to make ends meet. If you do have to occasionally charge your expenses, promise to use any future windfall to get you back to debt-free ground.

Married to a regular wage earner? Go give him or her a smooch and then discuss (civilly, please!) using that income for the essentials, and the irregular paychecks for savings and extravagant gifts.

Earmark your savings. Knowing where to save and invest money for your current and future self makes it less tempting to blow an unplanned windfall on frivolities. If you aren't sure, seek the help of a qualified pro.

Looking for a second opinion on how you're running the business of You, Inc.? No need to go it alone. Dial up a pro. TMF Money Advisor offers access to an on-call financial pro (in addition to all sorts of cool online money management tools). What's great about the voices on the other end of the line is that they genuinely have your best interest at heart. They sell no financial products -- not insurance, mutual funds, or swamp land in Florida. And they have the Foolish seal of approval. Check out TMF Money Advisor for free the next 30 days.


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