A solid financial footing starts with setting a personal budget — and sticking to it.
Working in yachting can mean you get paid in many different ways. Perhaps your boss prefers pay during work time. Perhaps you’ve opted for the freedom of seasonal work. But even if you’re on a standard 12-month pay schedule, it’s never a bad idea to think about budgeting.
Start by writing out all your required expenses and how much you pay for each every month. When you total them all, you’ll get an idea of the minimum amount of money you need every month to cover your needs. Your basic cost of living covers the things you can’t live without. This could include rent or mortgage, food, utilities and insurance costs.
Must-have expenses vary by person and situation. Some folks might have to pay for childcare; others may have student loans or relatives to look after. Regardless, if you pay for it regularly, include it in your budget.
Give yourself enough cushion to cover wants and nice-to-haves such as dining out, subscriptions or memberships. Go through recent bank and credit-card transactions to see what you’ve spent on these recently and create a line item for each in your budget.
Once you have an idea of your discretionary spending, total it up. If you think that number is too high, set a reasonable lower amount to aim for next month.
If every month could bring in a different amount of pay, you could face some challenges. Think beyond only the last month and see what you made over the last year. Figure out your earnings for each of the last 12 months, add them up, then divide by 12 to get your average income. This should be more than your average monthly expenses. If it isn’t, you’ll need to shift things around to earn more than you’re spending. Even if you aren’t earning the same amount every month, you can save and spend accordingly.
Once you get paid, pay your necessary expenses and put the rest in a high-yield savings or money market account. Both earn a higher yield than a traditional savings account, and if it’s not sitting in your regular checking account you won’t feel compelled to spend it on a whim. These accounts give you easy access to your money when needed while earning interest on your savings. In a month where you earned less, you can tap in to your savings or money market account to cover your expenses.
Your budget isn’t set in stone. It’s a living, breathing document. Don’t be afraid to make adjustments as your income and circumstances change. The most important thing is to start so you can give yourself an idea of where you are right now.