If your income and expenses go up and down from month to month, it’s a good idea to smooth it out as much as possible across the year.
This is especially important with Universal Credit because it’s paid monthly in arrears and based on the minimum income floor.
So, if you have a lean month following a profitable month – the combined total of your earnings and your Universal Credit might be low. This is because if your income falls below the minimum income floor, it won’t be topped up.
To manage your income peaks and troughs, work out the total amount you earn in a year. Make sure you take into account all your expenses. Divide it by 12 to get an average monthly amount.
Whenever you earn more than the average in a month, try to put the extra to one side. This is so you can use it when you have a less profitable month.
Also, don’t forget to plan for infrequent bills, such as Income Tax.