Irregular income makes savings a strain

Not everyone gets a paycheck every two weeks. Those who do have it easy when it comes to finding money to save: Part of the paycheck can be sent directly to a savings account before it’s ever seen. But for those who are self-employed or whose annual income is received on a seasonal basis, accumulating savings can be difficult.

“Many of these hard-working people have income that fluctuates from month to month, making it harder to establish any type of regular savings plan,” said Brad Stroh, co-CEO of Bills.com.

Here are some ideas to help you create savings routines, even if your income is irregular.

•Determine what your baseline expenses are. Those are your mortgage or rent, utilities (those will vary per month, but you’ll know the ballpark figure) and food. Hold off making any extra purchases and bank the money you save until you’ve accumulated enough to cover quarterly taxes, emergencies and six months of living expenses. Once you have that, funds can be pulled out during lean times and put back when income increases.

•No matter the size of each check you receive, put aside a predetermined percentage for savings.

•Bank any extra income. If you have a yard sale or sell items at an online auction, or if you receive a bonus or gift, save the money. If you have multiple sources of income, take the checks from one source and count them as savings.

•Ask your bank to make automatic withdrawals and deposits each month from your checking to savings accounts. Start small if you need to — perhaps $25 or $50 a month — and consider it as a bill you’re paying.

•When you pay off a debt, such as a credit card or loan, add that money to the amount you save each month.

•Don’t get stuck in a savings-account rut. Investigate money market accounts. You’ll earn higher interest, and your money won’t be untouchable if you need it in emergency. Purchase short-term CDs when you reach the minimum investment, often only $500. Those usually roll over automatically, extending the term and adding your accumulated interest to the amount of the new CD. Review these once a year and consider consolidating into larger CDs.