Dave advises Rob on how he should budget an irregular income throughout the year.
QUESTION: Rob sells commercial real estate and makes one or two big sales that he has to live on for the entire year. How should he budget the irregular income?
ANSWER: You need to set up a separate account for your living expenses. That account should have one year’s worth of expenses in it and you need to pay yourself a monthly salary out of that. You’ll have to live on a budget to do this.
In addition to that, you need 6 months of expenses as an emergency fund.
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