The Slow Month Fund

 The term “feast or famine” can feel quite literal to a freelancer. Cash flow problems (famines) are inevitable. Whether they stem from late gig payments or lulls in work opportunities, they are terrifying. But how we endure our famines is typically a result of how we handle our feasts.

Creating a Slow Month Fund is not dissimilar to farmers stockpiling for winter. By taking the excess funds from a busy month and putting it directly into its own savings account, you can be sure that the next slow month is less terrifying. With a careful evaluation of your basic fixed and variable expenses, you all of the information you need to get started.

Responsible finance during busy seasons is tied to keeping an eye on lifestyle inflation. Instead of spending excess income immediately, we are deferring the spending to a not so distant month when our wallet is feeling thin. Whereas an emergency fund is in place to help you out in a catastrophic event, the Slow Month Fund is a helpful buffer that will likely be utilized more often. It’s like a “take a penny / leave a penny” bowl but instead of pennies we are dealing with entire months of expenses.

Here’s the basic strategy that I use for my own Slow Month Fund.

1)    Open a high yield savings account for the specific purpose of a Slow Month Fund. Keeping this money separated helps guarantee that it will be used for the intended purpose.

2)    Become knowledgeable of the typical busy seasons / slow seasons for your industry.

3)    Aim to accumulate 2 months’ worth of fixed expenses by the end of every busy season.

4)    To achieve this, I first pay the current monthly expenses in its entirety. Any and all leftover income is diverted directly into Slow Month Fund until I reach my goal of 2 months’ worth of fixed expenses.