People buy some items, like paper and pasta, all year long. They buy other items once a year. Take Christmas trees, for example. People who sell them make money in December. Can you guess why?
Seasonal businesses earn money over a short period of time. How do they make this income last all year?
“We do the best we can,” Jane Waterman says. She’s a co-owner of Uptown Christmas Trees. The business sells trees in New York City. Most of them are grown in Vermont.
Waterman and her family run the business. They have done this for more than 45 years. She says it’s hard to make seasonal income last. “We are scraping by more at the end of the year than at the beginning,” she says. “You think you have a lot of money when you’re working. But you actually don’t.” So what does she do?
Building a Budget
Waterman makes a budget. A budget is a plan for spending and saving money. You plan to pay for what you need, plus a few things you want. And you plan to save.
To make a budget, Waterman uses math. She starts with the total amount of money she earns. She divides that amount by 12, the number of months in a year. From that number she subtracts her monthly expenses . Whatever is left over, she saves (see “Backup Plan”).
Would you like to create a budget for yourself? It’s never too soon to try!
Seasonal workers need a backup plan. A tree seller can have a bad season. This might be due to bad weather. Or there could be a tree shortage.
So Waterman has an emergency fund . Many seasonal workers do. They put some of their savings into it. This fund can help them get through tough times.