Many people who work at jobs where they earn irregular income often think that they are at a financial disadvantage when compared to people with fixed incomes. For instance, if you work a traditional 9-to-5 job, you know when to go to work, when to leave, and how much you’ll get at the end of the day/week/month for your troubles.
With an irregular income such as trading the financial markets, earnings commissions, or freelancing, you are never quite sure about how much money you’ll make each month. Hence, people that draw an irregular income often feel that the ‘instability’ of their income is a limiting factor on their finances. However, an irregular income is not necessarily a financial handicap. This piece looks at four ways earning an irregular income could be great for your finances.
You get paid commensurate with your efforts
When you work a traditional 9-to-5 job, you exchange your time, skills and expertise for money and your boss determines how much you earn. However, there’s often a disparity between how much you think your time is worth and how much your boss thinks your time is worth. However, in a job where you earn an irregular salary, you can (sort of) be paid in tandem with the efforts you put in into work. An irregular income means there’s no limit on your income because you always make more money taking on more tasks.
You are more in tune with your finances
An irregular income helps you to be in tune with your finances because you’ll be forced to pay attention to your cash flow patterns. For instance, if a sudden financial need surfaces, you can choose to take a quick loan that will be repaid with your earnings from an extra task instead of dipping hands into your savings or selling your investments prematurely to foot such bills.If you work at a fixed-income job, your income will most likely be automated and you’ll get paid like clockwork on a specific day each month. The automated nature of a fixed income might cause you to be detached – when you don’t keep tabs on your money, you’ll be surprised at how quick you could lose control of your money.
You can afford to create bigger financial goals
An irregular income also affords you the opportunity to create bigger financial goals because there’s no limit on how much money you can make. Once you set a base budget for your regular expenses such as rent, utilities, and groceries – you can start working hard to make some extra money that you could apply towards specific financial goals. If you think it’s high time you went on a vacation, bought a new car, or remodel your house, you could choose to close a couple more sales, make some extra trades, write another e-book, or hold another webinar to raise the funds you need. However, if you are earning a fixed income, you’ll be forced to reduce your expenses in other areas in order to raise money for new financial goals.
You control your most valuable asset
Earning an irregular income in a job where you are paid according to your effort also affords you an opportunity to control the most valuable asset you own – your time. You are not under obligation to punch in a clock and you can choose to work as much or as little you want in order to maintain a work-life balance. For instance, you could choose to work an 80-hour week this month if you want to double your earnings so that you can take the whole of next month off from work.