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How to Balance Yearly Budgeting with Seasonal Income

by U.S. Financial Diaries

Photo credit:  Robin Holland

Photo credit:  Robin Holland

Many of the households included in the U.S. Financial Diaries project operated on a weekly or monthly budget, balancing income and expenses in relatively short-term periods.  However, the subject of the latest household profile, provides an example of long-term, annual budgeting.

Sandra Young lives in Brooklyn with her grown children Tyler and Kayla. She manages several branches of a tax preparation agency, which means that she earns most of her income during the six months between November and April. Sandra has chosen an unusual structure for her financial life, and the seasonal nature of her income means that she has to budget over a longer time period than many households. Despite the irregularity of her income over the course of a year, Sandra’s financial life is stable, and she retains a remarkable level of confidence and control over her finances. This level of control is thanks largely to her straightforward and highly disciplined system of budgeting and financial management.

The U.S. Financial Diaries project, a joint initiative of NYU Wagner’s Financial Access Initiative (FAI) and The Center for Financial Services Innovation (CFSI), reveals hard-to-see aspects of the financial lives of working Americans, providing new insight for the design of financial services policies, programs and products for a broad range of Americans.  Each of the project's Household Profiles presents the financial life of one family in the USFD study. While these families are not necessarily representative of the total sample, they illustrate recurring themes: households struggling with income volatility, unplanned expenses, and finding ways to save and invest, but also using creative–and sometimes counter intuitive–budget and money management strategies to help make ends meet. 

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