Most of us face a cash crunch every now and again and this can cause anxiety.

Many of us receive a steady pay check however those who don’t have a stable source of income often wonder whether there will be enough in the account to pay the bills at the end of the month. Cash flow calculations can be tricky.

Here are some suggestions:

· Calculate your minimum monthly expenses (necessities – typically these are fixed or very predictable)
· Calculate your discretionary expenses (ones you can control)
· Calculate your average monthly income (you may have to look back over a long period of time)
· Take note the lowest monthly income you’ve received

Now to use the information you’ve collected:

1. Does your average monthly income cover your expenses?
2. Yes? Great.
3. No? If not there are 2 options – earn more money, reduce expenses

Below are a few suggestions to manage fluctuating income:

• Keep your minimum monthly expenses as low as possible
• Maintain an ‘extra’ amount in your account equal to 1 month’s expenses (a float) to cover unpredictable income
• Have a plan for monthly income over the average – put it into a savings account for the months when you earn lower income
• Save up for large purchases or savings such as RSP’s and make then when you’ve got the money instead of taking a loan which increases your monthly obligations