Erin Akery, of Madison, is the Senior Manager of the FEC. After graduating from the University of Alabama at Birmingham and working for two years with AmeriCorps in Boston, she joined United Way in 2013 to help Nashvillians achieve greater financial freedom. She offers her first-hand experience in establishing a spending plan despite the ebb and flow of work, especially for residents who work in creative careers.
“When my husband and I first started dating, his spending was erratic,” Erin says. “That was because, as a freelance writer, his cash flow was erratic. It was okay when money was coming in, but if it wasn’t, he was using a credit card.” In these situations, establishing spending parameters is critical, and the only way to have those when you’re self-employed is to set a salary for yourself and pay yourself at regular intervals.
“The key thing with his income was implementing a salary.” The couple started by examining his monthly needs, or fixed expenses, and coming up with a realistic and reasonable budget for the other categories, like food and gas. Next, they took all income and placed it in a holding account. Finally, they decided when and how much he was going to pay himself from a holding account into a personal account. And don’t forget to save for quarterly taxes! Paying the IRS was the most important step.
“The result has been smoother cash flow,” Erin says, “which has allowed us to save in a more regular and predictable manner. It’s also a lot less stressful. Erin teaches her clients that the ultimate goal is to keep your behavior the same, regardless of windfalls or leaner times.
If you’re dealing with irregular paychecks and need help establishing your own spending plan, Erin and the FEC’s staff of financial counselors can help plot out a path to financial freedom.
Call 615.748.3620 or visit fec.nashville.gov to schedule your free appointment.