In a good year, actor Grant Stimpson earns nearly £40,000. But when the work dries up, it can be half that or even less. "That's the lot of an actor: one year I can do really well, and the next there's nothing," he says.
This makes it particularly difficult to manage money. "When I don't get paid for a couple of months, I have to rack up debts on a credit card.
"And then, when the money pours in, I pay it all off and start spending again. It can be a bit of a nightmare."
His sporadic cashflow has so far held him back from starting a pension or saving up a deposit for a property. "I really want to sort this out but, as my income varies so much, I'm not sure about the best way of doing this."
Grant has been renting for 15 years: he pays £400 a month for his room in a shared house in London. A well-paid acting job last year allowed him, for the first time, to hunt for a place he could call his own: a barge.
Yet the cost of living on a boat where he looked - in both central London and Hertfordshire - proved horrendously high. After struggling to find a good deal, he decided to hold off for a few months. Since then, prices have soared even higher.
"I am still planning to buy somewhere but London is crazy for prices - even the mooring rent for a barge is astronomical. I'm trying to save and build up a decent deposit."
So far, he has invested £1,500 in National Savings & Investments (NS&I) income bonds and the same sum in premium bonds. He also invests £200 a month in a mini cash individual savings account (ISA), which currently pays 3 per cent interest per annum.
He has neither income protection nor critical illness cover to guard against sickness or accidents, and has yet to take out life cover. As for debt, he owes £700 on a NatWest credit card.
Interview by Sam Dunn
Grant Stimpson, 35, from Finsbury Park, north London.
Job: actor, currently touring the UK with a version of EB White's Charlotte's Web.
Income: varies from year to year but averages between £20,000 and £25,000.
Savings: £200 a month in the Co-operative Bank's mini cash ISA.
Investments: £1,500 in premium bonds, £1,500 in NS&I income bonds.
Goal: to buy a houseboat and sort out his retirement plans.
Grant must make his money work harder if he is to drum up a big enough deposit to put down on a home, says Justin Modray, an investment manager at Bestinvest, an independent financial adviser (IFA). And since his income is so variable, he needs an emergency sum of three to six months' salary to carry him through if the work dries up.
Darius McDermott, the managing director of IFA Chelsea Financial Services, recommends setting up a monthly savings account: the best rate available is 4.75 per cent at Bank of Scotland or the Halifax.
Grant's £700 credit card debt should be cleared quickly, advises Mr McDermott. "There is no point saving at 3 per cent [with Co-op] when your outstanding [NatWest] debt is charged at 17.4 per cent."
David Holbrook, the managing director of Hallmark-ifa, suggests switching the debt to a 0 per cent introductory deal to save on interest. Halifax One Visa would enable him to do this, says Mr Modray, as it charges 0 per cent on balance transfers for nine months, before reverting to a standard variable rate of 9.9 to 15.9 per cent.
The premium bonds will produce a return of no more than 2.4 per cent a year tax-free, warns Mr Modray, for just the small chance of a big win. The NS&I income bonds aren't much better: although they pay 3.45 per cent interest, Grant would be better off switching to a high-interest savings account such as ING Direct, which pays 4.5 per cent gross.
Alternatively he could transfer all the income bond money into a mini cash ISA for greater growth.
Mr McDermott recommends switching out of the Co-op mini cash ISA: Abbey currently pays 4.6 per cent, while Marks & Spencer offers 4.5 per cent. If his income becomes more regular, he should also think about "exposing some of it to a stocks and shares ISA".
A stakeholder pension is a good start, say all three IFAs: charges are capped at 1 per cent and it can be carried from job to job. However, Grant has a great deal to save, says Mr Modray. "If he starts saving £100 a month [5 per cent of his income assuming £25,000 a year], this might provide a pension of 17 per cent of his income at the age of 65."
Mr McDermott recommends Scottish Widows' stakeholder pension.
"It's worth considering critical illness cover to protect against a health calamity," says Mr Holbrook.
But this won't be cheap. "For £100,000 cover for 25 years, it could cost Grant £50 a month or more," says Mr Modray.
A houseboat may be Grant's dream, but his profession and income make such a purchase hard at the moment. Few banks are willing to lend on any structure without foundations, and specialist mortgages tend to be much costlier.
Without a sizeable deposit, Grant should instead consider buying a property jointly, advises Mr Holbrook, or a shared ownership scheme. This will enable him to buy a share in a property and pay rent on the remainder to a housing association. Over time, the idea is that he increases his stake until he owns the home outright.Reuse content