For most people, a budget is the first step to winning in the area of personal finance. Developing a working budget isn’t as difficult as most would have you believe, and you don’t need any sophisticated software to develop a budget that will work for you and your family. John Maxwell says that a budget is nothing more than you telling your money where to go, before you wonder where it went. For people with an irregular income due to commission or being self-employed, developing a monthly budget can sometimes cause a lot of anxiety, but it shouldn’t. The process is the same as those with a regular income; you just have a few more questions that need to be answered. The only real requirement for putting together a budget is your estimated monthly income.

The first question that needs to be addressed is the amount of income you expect to receive. Let's start with a worst case scenario. Because your monthly income is going to fluctuate, you will need to determine the amount that you will bring home during a bad month. If a bad month is $1500, then budget that amount on paper before the month begins. Here is where things will differ from those that have a set income each month. Let’s say you have a good month instead of a bad month. Instead of $1500, you actually bring home $2100; what will you do with the extra $600? What if you have a really good month and bring home $2700, or even $3000; how will you be a wise steward of those extra blessings? When working with an irregular income, your budgeting process is slightly different from everyone else. In addition to budgeting for a bad month, you also need to put together a list of items that will need to be paid if you bring home more than expected. For example, it would be nice to pay extra on debt, but if you only bring home enough to cover the necessities that is all you can do. If you do bring home more, now we can pay on those debts. Your list of items needs to be long enough to cover not just a good month, but a really good month. The idea is to make sure that no matter how much you bring home for the month, you have already spent it. This will help lessen the chance you will 'impulse spend' your money away.

When creating your list you will need to write down everything that isn’t already covered in your “bad month” budget. Make the list as exhaustive as you can, including a few things that will only be covered if you have a really good month. Once the list is complete, prioritize the list with the most important items at the top and the least important at the bottom. Re-write your list in priority order with the amount you will pay on each item. Now when the money comes in, you simply start at the top and start working your way down the list. When you run out of money, you stop. At the end of the month, draw a line above the things that did not get addressed. Depending on what is below the line, you may want to move some of these items up a little higher next month. One thing you will want to make sure to include is emergency savings to cover a really bad month when the income doesn't allow you to cover your necessities.

Each year around this time I start thinking about Christmas shopping and doing my tax return. Two things that I shouldn’t dread, but because of the process involved I always do. Because of online availability I don’t mind Christmas shopping as much as I used to, and with the ever improving tax software that is available, completing my tax return is becoming less of a chore also. Not only does the software walk me through the complex tax code, but as soon as I am done I know exactly what my tax refund is going to be. I have talked to many people who look forward to getting a large tax return each year as if they are sticking it to the government. When you get a large tax return what it really means is that you have given the government use of your money, a loan if you will, for the entire year and they are simply returning it to you, without paying you any interest. Realistically speaking, the government is sticking it to you.

What can you do about it? Well, the easiest thing for you to do is determine how much more you should be bringing home each month instead of having it taken out as taxes. For example, if you received a $3600 tax return last year, then you overpaid in taxes approximately $300 a month. That is approximately $300 each month that you could have used to pay off debt, build an emergency fund, invest for retirement, or save for college. I am sure you can think of several other things that would have made you more happy than giving the money to the government.

There are a lot of calculators that will help you determine if you are paying too much in taxes each month. They range from very complicated like the IRS Withholding Calculator to very simple.The best one I have found is the Kiplinger’s quick ‘n’ easy Withholding Calculator. If your current tax status hasn’t changed from last year, you will be very pleased at how easy it is to use. If things have changed (i.e., your marital status, you have a new baby, your income has changed dramatically, etc), this calculator may not be as beneficial, but for some this is all you will need to start bringing home more of your money each month.