If you run your own business — like I do — your personal and professional expenses will overlap. So I understood exactly what commenter, Emma, was getting at when she posted this on Wednesday:

My question is like this: what are some things I can do to keep saving when I know I have large expenses that come up a lot? I’m am actor, and I’ve had several big trips for auditions and jobs the past few months that have taken a lot of money all at once to get me to where I needed to go, staying over in a hotel, food on the road, that kind of thing. And I get home and it’s like…. oh. Guess my savings for that pay period is kind of shot.

Here’s the short answer: You have to budget for these expenses, even though they’re not regular. The costs of traveling to auditions and jobs is what I would call overhead. But whether these are business or personal expenses, the issue is the same: You’ve got to budget for them.

The same is true for anyone facing irregular or unexpected costs. Many financial advisors suggest something called an Emergency Fund (EF). Whether this fund is used for home repairs, unexpected medical costs, to replace a totalled car or to travel to The Poughkeepskie Playhouse to star in a revival of 42nd Street, the mission is the same — have enough cash on hand to cover unforeseen expenses.

You also must budget for savings. Even if it’s only $50 each month, make sure that this money is going into a savings account before other expenses are paid for. I like to say that I’m paying myself first. After a while, you won’t even know that it’s gone. You might even be able to set up an automatic transfer, which is a great way to keep you honest.

Why do you need savings? Well, the answer is obvious. If you literally follow the old stage adage and do break your leg, you could be out of commission for a while — no auditions + no gigs = empty bank account. In fact, it’s now recommended that you have six months to a year of living expenses in your bank account for this very reason. So, if you’re spending $3,500 each month, you’ll need $21,000 to $42,000 in the bank to take care of these emergencies. That’s a lot of cash!

If that amount feels out of reach, set some goals — 10% by the end of the year, for example. Doing a few calculations can help you break things up into manageable pieces.

And here’s the other thing: you can squirrel away cash for lots of different reasons, including travel. You could decide to split your savings deposit, putting 70% in an emergency fund and 30% in an auditions/jobs account. So, if you have $100 for savings each month, that would mean $70 in savings and $30 in a travel account. This will give you some cushion, if a really cool opportunity comes up that you haven’t budgeted for.

So how do you budget for travel to auditions and jobs (or create an emergency fund)? My suggestion is to take a look at what you’ve spent in the past. Add up all of your audition expenses for the last three months and divide by three. (Or over the last year and divide by 12 or whatever numbers you have on hand.) Then take a good critical look at that number. Does it realistically represent what you normally spend on auditions and jobs? Did you go on more or fewer than usual? Did you have to fly farther or stay in an expensive city? Adjust this number based on the answers to those questions.

Now you have a good idea of what you can expect to spend each month on traveling to auditions or gigs. More than likely, this won’t be an exact number. If you spend less, put the extra in an auditions/jobs account. If you spend more, take it from that account. (And if you don’t have enough saved up yet, you might need to make other adjustments to your budget — like eating Ramen noodles for a while.)

Here’s one more step you can take. Your business is like mine. It’s feast or famine — you never know exactly how much you’ll be bringing in each month. So estimating a percent that you can use for travel expenses can help you stay on track. There are several ways to do this, and here’s one idea:

1. Find your average monthly expenses for traveling to auditions and jobs. (This is what you did above.)

2. Find your average monthly other expenses. (This will include rent, groceries, utilities, education costs, and yes, savings.)

3. Add the two together to get your total average monthly expenses. (Another way to think of this is your total income.)

4. Divide the travel expenses by the total. That will be your audition expenses rate.

So let’s say that your average monthly audition expenses are $2,000 and your other monthly expenses are averaged at $4,500. That means the average of your total monthly expenses (or total income) is $6,500. To find the audition expenses rate, divide:

2,000 ÷ 6,500 = 0.31 or 31%

So, on average, 31% of your monthly expenses should go to traveling for auditions and jobs. Even if your monthly expenses go up or down, you can keep this percent in mind for setting your audition expenses budget. If you’re making less money, you can trim your travel expenses. If you’re making more money, you can up that part of your budget.

Hope that helps, Emma!

Do you have different advice for Emma? If so feel free to share (nicely) in the comments section. How do you think this process would work for your unexpected expenses? If you have a personal finance question, don’t hesitate to ask!

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