Financial Planning for Seasonal Workers

The following is a post by MPFJ staff writer, CJ, who blogs at thesingledollar.com about personal finance, budgeting, frugality, and debt repayment.

How often do you get a paycheck? If you’re like most American workers, you get paid on a regular schedule year-round. If you’re a freelancer, your pay is more irregular, and could arrive at any time. But there’s a third and more mysterious category: seasonal work.

Seasonal workers include professionals like teachers (who often receive a paycheck for only nine months out of the year); workers doing manual labor outdoors, who often can’t work much, if at all, during the winter (think farmhands, construction workers, or baseball players); and, conversely, workers who are regularly hired by retail stores for a few months during the holiday rush and then laid off in January. These workers have widely varying annual income, but they all have one thing in common: they are only paid during one, two, or three of the four seasons, yet they all have year-round bills. This can make regular budgeting really difficult.

Seasonal workers can take steps to stabilize their financial situation, however, by planning ahead. Here are several steps you can choose to take if you fall into this category.

Save for the Offseason

Although seasonal workers don’t get paid year-round, they can often accurately predict their yearly income and expenses. Teachers, for example, know they will get nine monthly paychecks but will need to cover twelve months of bills. They can set aside 25% of each incoming paycheck in a savings account and then pay themselves a “salary” over the summer.

Have a Big Emergency Fund

Seasonal work is more stable than full-on freelancing…but there’s always a risk. For example, if you’re a construction worker who often works substantial overtime during the summer, what are you going to do if it’s a particularly rainy year and there are many days on which you can’t work? Having a bigger emergency fund than a salaried year-round employee can help cushion these kinds of blows.

Check Your Insurance Options

When I did seasonal work, I received health and life insurance through a union (my employers paid into a centralized fund) so that I could be covered year-round even though there was typically very little work during the winter. Every seasonal worker’s situation will be different, but be sure you’re fully covered year round no matter what.

Pick Up Freelance (or Seasonal!) Work During the Offseason

If you have a seasonal job, you might be able to supplement your income by picking up other seasonal work. A teacher might teach summer school or, like one of my teachers did, spend the summer hawking beer at a sports stadium (bonus: he saw all the games for free!) A construction worker might get an indoor holiday retail job when the building trades go into their annual deep freeze. This kind of strategy can stabilize your yearly income, especially if you have a major emergency and can’t set aside enough during the year.

One way or another, seasonal workers know they’ll have at least a few months to cover sometime during each year. Planning ahead for this normal part of your career can make this less stressful, and allow you to enjoy some downtime rather than worrying about your bills.

How about you all? Would you consider yourself a seasonal worker? If so, how do you find is best to plan financial to live a balanced life throughout the whole year?

Share your experiences by commenting below! 

***Photo courtesy of https://upload.wikimedia.org/wikipedia/commons/e/e2/Financial_Planning_-_Expanding_the_Body_of_Knowledge.png