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Does Your Income Vary From Month to Month?

Sarah Putt, MA, OTR/L

Got a variable income?

While many jobs in the occupational therapy profession are salaried and have a consistent rate of income expected each month, many positions often aren’t. 

There are PRN jobs, independent contracting jobs, employee jobs that are paid on a per client basis, etc. 

And when your income varies from one month to the next, it can make navigating expenses and savings difficult. 

So for today’s #otfinancialfriday we’re discussing how you can thrive with your finances even with a variable income. 

First things first, you’ll need to establish your baseline expenses. You need to have an idea of what your recurring monthly costs are, including transportation, housing, food, savings amount, minimum debt payments, and other miscellaneous expenses that you pay each month. 

This is basically the bare bones that you need to have on hand each month in order to cover your expenses. 

And yes, a savings amount is in there, because even if you can’t contribute a lot, you should still be contributing to your savings every single month. 

Now that you know what your baseline expenses are, you can compare that to your minimum income months. 

If your lowest monthly income doesn’t cover your baseline expenses, you’ll have to revisit your budget and adjust it so that you can cover them each and every month without having to stress about it. 

Bottom line is that your lowest expected income month should be able to cover your baseline monthly expenses without worry. 

Once that is covered, you can start allocating funds to other things. If there is a surplus, you can contribute to other important buckets, including an emergency savings, paying off more debt than just the minimal payments, investing or even saving for a vacation. 

It’s that simple. 

Know your expenses, cover them with your minimum monthly income, and allocate for when there’s a surplus.  

Do you have a variable income? What strategies have you found to be helpful? Any other aspects to consider?

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