Understanding how to manage the ups and downs of irregular income is a challenge for many new real estate agents (and can even plague some of the veterans during a downturn!). Boom or bust, you need to build up some skills to manage the erratic nature of real estate income.
J.D. Roth, author of “Get Rich Slowly” and “Your Money: The Missing Manual,” recently put together a very wise article for the Behance magazine 99U. We encourage you to spend the time to read and share his advice with others.
Some highlight topics he covers in depth:
- Establish a foundation of thrift.
- Prioritize spending.
- Build a buffer of savings.
- Tap your business account only as needed.
- Resist lifestyle inflation (especially during the good months).
- If possible, live off just one income.
Also, he explains this relatively simple system:
“I base my budget on my lowest monthly income from the previous year. When money comes in, it sits in a bank account. Each month, I write myself a paycheck based on my budgeted amount. The rest of the money is saved to pay taxes. If there’s any left over at the end of the year, I get a bonus.”
Check out J.D. Roth’s full article here:
http://99u.com/articles/6486/how-to-budget-for-an-irregular-income
