Budgeting: Managing lean periods

Another challenge to budgets include lean periods. A lean period is when your income is under extra or unusual strain, and you do not have enough cash to cover your commitments.

For example, you might have to tighten your belt after a big expense, like an appliance breaking down, or during times like Christmas, Eid or school holidays when you might be feeding more people than usual. Lean periods might not just result from your spending rising, but also from your income dropping, like reducing your hours of work or losing some benefits. 

Let’s look at two case studies. Ross is a hotel barman at a seaside hotel which mainly hosts holidaymakers. He is on a zero-hour contract. He earns a little over minimum wage for his shifts, but he usually is able to top this up with tips when the hotel is busy. His income is variable from month to month, depending on how many hotel shifts he gets offered.

His income tends to improve over the summer months and during school holidays, when he has more shifts, and customers are generous with tips. At other times, particularly in the winter, the hotel is less busy and he’s not on the rota so much. So, Ross’s lean periods are the winter months and when schools are in session.

Farida works in a primary school as a teaching assistant. Her contract is term time only, which she likes because she has twin children. She gets paid when she is in work during term, but is unpaid during school holidays. The twins’ birthdays are in September, when she also has to pay for their uniform and school supplies as well as gifts. Farida’s lean periods are the Easter and Christmas holidays, with a particular squeeze in summer.

Tough patches like this can force you to compromise on how you manage your money and what you spend or save. To help navigate these tricky times, see if you can anticipate them before they come. You may want to ask yourself, is there a particular time of year that I regularly struggle, like Christmas? Leading up to these times, could I save a little extra to help? Are there ways to boost my income? For example, could I do extra hours at work before things get tough? Or am I entitled to any state benefits that I’m not receiving?

A lot of us might feel wary about considering benefits, but they’re not just there for those unable to work. They’re there to support people in hard times and the overwhelming majority of people who get them also work. There are organisations that can help you find out what benefits you’re entitled to. You may not have all the answers now as to how to manage your lean periods, and that’s fine.

We will help you to figure these out during the course of these videos. It’s great that you now know that lean periods can affect us all, and there are ways to help yourself through this.

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