{ 9 comments… read them below or add one }

Evan August 23, 2010 at 11:35 pm

I have been thinking of a business idea for those with irregular income. You trade in your lump sum for a weakly paycheck. Sort of like a VERY short term fixed annuity.

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joeplemon August 24, 2010 at 6:53 am

Evan,
Might work, but isn’t my “hill and valley” account the same concept by doing it yourself?

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Evan August 24, 2010 at 7:52 am

It could but this would take the discipline away from a person. THey would be set up an income stream. Sort of like turning their commission based into a salaried position. Just an idea I have been messing with.

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joeplemon August 24, 2010 at 8:45 am

Now that I think about it, you may be onto something. Although some families could handle the discipline of a hill and valley account, I like the concept of “automating” their income so that discipline isn’t required. My hunch is that many irregular income earners are good at earning (commissions or running their own business) but not necessarily good at managing budgets.

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Khaleef @ KNS Financial August 24, 2010 at 3:22 pm

I love the idea of the “hill & valley” account. Also, having a system in place to avoid wasting the “hills” is important. So many people would deplete the account BEFORE ever hitting a “valley”!

Also, the mileage/car account for business owners is great! That can really help one see the impact of their business driving. If you mainly use the car for your business and the account never has enough to cover your expenses, there is a problem!

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joeplemon August 24, 2010 at 4:03 pm

Khaleef,
This are very simple concepts which really work because of their simplicity. I used to drive on mileage and once I figured out that I needed a separate account for that vehicle, I never had any problems with payments, repairs, tires, fuel, etc. Of course I eventually began paying cash for my vehicles, all out of that fund. Simple and effective.

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Roshawn @ Watson Inc August 24, 2010 at 5:53 pm

Yes, the hill and valley account is very helpful. This always reduces anxiety because you have a plan.

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Lizzy @ Debt Free and Broke August 13, 2011 at 12:29 pm

I’m glad you added 1a, so many people write about being self-employed, but never mention saving away for taxes. I am glad that we do. I want to get a hill and valley account set up, but we haven’t had any $5,000 income months yet, we are stuck with the right on or low income months so far.

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joeplemon August 15, 2011 at 8:41 am

Lizzy,
Good job setting aside money for taxes! I assume, that once you have a few “hills”, you will be able to get that hill and valley account up and going. Keep on target and those hills will be coming your way.

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