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How to Manage Irregular Cash Flow

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How to Manage Irregular Cash Flow
Decades ago I sold real estate. Straight-commission work means irregular pay: some months bring big checks, others bring none. I liked it because I was paid for performance — if I didn’t sell, I didn’t earn. Like other freelance jobs, you often put in the work and don’t see an immediate payoff.

I remember a client with an incredibly large house. I brought a detailed marketing plan and spent hours talking with them. They kept postponing and asking me to come back. After three visits I realized they enjoyed hashing over “what ifs” and had no real intention of selling. How much did I earn from them? Nothing.

Other times I met a client and closed a sale within a week; the per-hour pay on those deals was excellent. Over time it evened out: the harder I worked, the more I made. The real uncertainty was not effort but which efforts would pay off. Gradually I learned to spot clients likely to buy and those who were wasting my time.

Freelance or commission work requires careful cash-flow management. To make sure you can pay your bills, have a cash cushion of three to six months’ living expenses before taking on work with an uncertain pay schedule.

If you don’t have that cushion but want to keep freelancing or working on commission, start by saving a portion of every dollar you earn — steady saving will give you more options and protect you when income dips.

We all have months when income falls short of expenses. How do you manage uneven cash flow?