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How to budget on an unstable income

These budgeting tips can come in handy when creating a budget with an unstable income.



Living on an unstable income might be difficult as this means that one cannot tell how much will be coming in every month. Many people hold the notion that an unstable income does not require an organised budget because of its unpredictability, but a budget remains an essential tool in ensuring proper financial management regardless of the nature of the income. Making planned decisions about your income and having a budget in place serves the purpose of enhancing financial accountability.

While a variation in income might pose a challenge in budgeting, there are a few techniques that can help achieve this stride. The following budgeting tips can come in handy when creating a budget with an unstable income.

1. Keep records of income

You are required to have a sound knowledge of your income and expenses in order to create a reasonable budget for your finances. This can easily be achieved if you keep effective records of your earnings. As a full-time, part-time or commission-based earner, you need to have a grasp of how much you earn over a given period of time. This will help to regulate budget planning and assist in determining how much is allocated to meet different needs.

Read Also: Curfew: How to plan for a financial emergency

2. Set financial goals

One of the essential components of budgeting is the setting of financial goals. Financial goals tell what you intend to achieve with your income. These goals can be categorised into three groups which are:

  • Short term goal which can be within one year.
  • Midterm goals which can be between one to two years.
  • Long term goals which can be from two years and more.

Once you have identified your goals, it becomes easier to keep track of your progress towards achieving them. When budgeting on an unstable income, financial goals will help you utilise your finances effectively. Short term goals can be reviewed regularly and addressed as finances flow in at different times while long term goals can be saved up for.

3. Prioritise necessities

As your financial goals are been written down, you should take into consideration how necessary or needful they are. Some fixed essential expenses like rent can fall under mid-term goals while some variable expenses like feeding, clothing, transportation, and others which are also essential can be written down as short term goals. Regardless of if they are fixed or changing, these essential expenses are necessities that should be prioritised when making a budget.

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4. Diversify your earnings

A little here, a little there, when collected together, they can make a greater whole. Having diverse streams of income can lessen the pressure of meeting certain financial plans which makes budgeting more achievable. Living on an unstable income has its moment of ups and downs. There are periods of high income and low income as well. Diversifying your earnings will help to make up for those periods of low income. These diverse streams of income can either be budgeted for separately or collectively.

5. Incorporate spending and saving plans

To meet some needs that might pop up or some needs that may take a long period of time to be met, it is important to have a savings plan properly incorporated in the budget. One might be wondering how to save up with an income that cannot be predicted. This is where making plans with an estimate comes in. Look over the previous months, make an estimate of what should be coming in next and allocate it into savings and spending plan. This estimate can be adjusted as time goes on based on the flow of income but your budget should treat your saving as important as your expenses.

Read Also: Ecobank Transnational Inc. records 11% increase in interest income for Q3 2020

Budgeting for an unstable income might not be an easy stride, but it is an essential step that needs to be imbibed if anyone desires effective financial management. Try as much as possible to follow the strategies discussed here when budgeting on an unstable income.

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Personal Finance

5C’s of creditworthiness: What lenders, Investors look for in a business plan

Business owners need to be aware of the criteria lenders and investors use when evaluating the creditworthiness of entrepreneurs seeking financing.



Five things to consider before securing a loan

Banks usually are not a new venture’s sole source of capital because a bank’s return is limited by the interest rate it negotiates, but its risk could be the entire amount of the loan if the new business fails. Once a business is operational and has an established financial track record, banks become a regular source of financing.

For this reason, the small business owner needs to be aware of the criteria lenders and investors use when evaluating the creditworthiness of entrepreneurs seeking financing.

Will the business that an entrepreneur actually creates look exactly like the company described in the business plan? Of course, not.

The real value in preparing a business plan is not so much in the finished document itself but in the process it goes through – a process in which the entrepreneur learns how to compete successfully in the marketplace. In addition, a solid plan is essential to raising the capital needed to start a business; lenders and investors demand it.

Lenders and investors refer to these criteria as the five C’s of credit.

READ: 5 ways to raise funding for your business

1. Capital: A small business must have a stable income base before any lender is willing to grant a loan. Otherwise, the lender would not be making, in effect, a capital investment in the business. Most banks refuse to make loans that are capital investment because the potential for return on the investment is limited strictly on the interest on the loan, and the potential loss would probably exceed the reward. In addition, the most common reasons that banks give for rejecting small business loan applications are undercapitalization or too much debt. Banks expect a small company to have an equity base investment by the owner(s) that will help support the venture during times of financial strain, which are common during the start-up and growth phases of a business. Lenders and investors see capital as a risk-sharing strategy with entrepreneurs.

2. Capacity: A synonym for capital is cash flow. Lenders and investors must be convinced of the firm’s ability to meet its regular financial obligation and to repay loans, and that takes cash. More small businesses fail from lack of cash than from lack of profit. It is possible for a company to be showing a profit and still have no cash – that is, to be bankrupt. Lenders expect small businesses to pass the test of liquidity, especially for short term loans. Potential lenders and investors examine closely a small company’s cash flow position to decide whether it has the capacity necessary to survive until it can sustain itself.

READ: How to scale as a small business on a budget

3. Collateral: Collateral includes any asset an entrepreneur pledges to a lender as security for repayment of a loan. If the company defaults on a loan, the lender has the right to sell the collateral and use the proceeds to satisfy the loan. Typically, banks make much unsecured loans (those not backed up by collateral) to business start-ups. Bankers view the entrepreneurs’ willingness to pledge collateral (personal or business assets) as an indication of their dedication to making the venture a success. A sound business plan can improve a banker’s attitude towards venture.

4. Character: Before extending a loan or making an investment in a small business, lenders and investors must be satisfied with an entrepreneur’s character. The evaluation of character frequently is based on intangible factors such as honesty, integrity, competence, polish, determination, intelligence, and ability. Although the qualities judged are abstract, this evaluation plays a critical role in the decision to put money into a business or not.

READ: 7 Ways to pay for your higher education

5. Conditions: The conditions surrounding a funding request also affects an entrepreneur’s chances of receiving financing. Lenders and investors consider factors relating to a business’ operation such as potential growth in the market, competition, location, strength, weakness, opportunities and threats. Another important condition influencing the banks is the shape of the overall economy, including interest rate levels, inflation rate, and demand for money. Although these factors are beyond an entrepreneur’s control, they still are an important component in a banker’s decision.

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The higher a smaller business scores on the five C’s, the greater its chances of receiving a loan.



Written by Chukwuma Aguwa

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Personal Finance

Don’t be fooled by COVID-related scams

Always consult the institution in charge of health-related matters to confirm any fishy information you come across.



The nature of and the manifestation of the Covid-19 disease is such that there’s only a little time available to remedy the situation before it gets chronic. Although the infection begins by exhibiting mild symptoms, if you do nothing in a short time, it could lead to death in a matter of days.

This whole picture has caused many to become desperate about Covid-related issues, launching into panic mode at the sight of any information. As a result, such people are not far away from falling for fraudsters.

With the different kinds of news flying around, you mustn’t be fooled by Covid-related scams.

The Coronavirus threatens the health of millions of people around the world daily, also killing thousands along the way. To curb the spread and remedy the situation, bodies like the CDC, WHO, and every country’s local health organisation like the NCDC, frequently circulate information around communities. However, it has also led to fraudsters taking advantage to provide fake news, and even asking for donations.

Each day, there seems to be a new account or NGO asking for donations into the health sector, and though some are legit, many are just fraudsters posing to take advantage of innocent citizens. So far, numerous complaints about scams have been recorded, especially with people who are looking to support the health cause in any way they can.

Channels used for COVID-related scams 

There are three major ways scammers take advantage of the haziness of the situation to dupe people. To start with, they appeal to the emotions of humans, who see the high death toll and suffering. As a result of what is happening, people have been willing to donate funds for medical supplies, isolation centres, and financial compensation for medical workers.

Scammers take advantage of this by posing as charity organisations and solicit for funds. Most times, as soon as their target is met, they clear their footprint without leaving a trace behind.

Another way they scam people is by manufacturing and selling fake or low-quality health products. Everyone wants to get their hands on a cure, or something that can at least protect them from the virus, and scammers are meeting their needs by providing just that.

The World Health Organization currently approves only one vaccine, and any other thing outside it is outrightly fake or just a supplement that will help your body. Currently, only the Pfizer vaccine is clinically tested and approved to work. Be sure to not throw your money in the wind by purchasing some of these fake drugs around.

Lastly, scammers create systems to extract a patient’s personal information, thereby having access to the person’s true identity. It could be in the simple form of opening a registration portal where you supply all your details.

Therefore, only give information to approved bodies and not any random online site that appears legit. These fraudulent individuals can do a lot of damage to your identity. Stay vigilant, only communicate with approved bodies, and always ask questions if you are not sure or suspect foul play.

The place of electronics in COVID-related scams

These fraudsters usually reach out to you through the digital sphere. Hence, watch out for cold calls, text messages, or emails requesting donations to certain bodies. The best way to confirm the legitimacy of such a message is to visit the organisation’s official website in a different browser. Never follow the link in the mail or text directly, as it can be easily embedded with spyware. Therefore, a single click could see them extract all your personal information, including bank details.

Also, please stay away from those who claim to have a cure, and accompany it with testimonies of people who have used it. They are low graders desperate for your money. Vet them by searching online and see what people are saying. In all, always look out for suspicious messages, and opt out if you are sceptical.

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In a nutshell, you should not believe any cure, vaccine or supplement that the World Health Organization does not approve of.



The government or legit health institutions do not cold call citizens to request donations or coerce them into making one. If you receive a call out of the blues, chances are it’s a scam, which is why they mostly try to hurry you to donate before you realise it. Always consult the institution in charge of health-related matters to confirm any fishy information you come across.

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