How to budget when you have irregular income

Looking for a way to maximize your irregular income?

You are in the right place!

Whether you’re a business owner, remote employee, or running a blog, preventing the hunger cycle is essential to setting yourself up for financial success.

Let’s take a closer look at how you can plan your budget if your income is not always the same.

What does “irregular” income mean?

Irregular income means there is no stable flow of money. This applies monthly, quarterly, or annually in addition to biweekly payments.

You may be earning irregular income: You:

• Work for a company that only hires during summer or other seasons
• Variations in client workload requests
• Or you are still in the early stages of starting your business

When working with unpredictable income, budget rankings can help you stabilize your finances and prevent the domino effects of late payments. It also helps you make sure you have enough essentials such as rent and groceries at all times.

But that’s not always easy, right?

How can you create a supportive financial plan when your money fluctuates monthly?

Continue reading to find it.

How to budget when you have irregular income

Here’s how you can plan your finances when you have a variety of income:

Track your monthly income and expenses.

Track your credits and deduct expenses to make it clear how much you earn.

Make a habit of doing this every time you receive your money or whenever you need to pay your bill. By tracking this accurately over time, you can average your monthly income.

Come to think of it…

Average your monthly income and expenses.

Compare monthly credits and debits.

How much do you earn on average per month? Collect PayStubs, deposit statements, or invoices for the past 6 to 12 months and calculate these. Next, divide your total income by 12.

How much does it cost you each month? Look at your monthly bank statements and invoices, add them, then split them up by 12.

Knowing your average monthly income and expenses will help you plan your budget more accurately.

Use Zero Sum budgeting.

Assign a specific purpose to every dollar you earn.

This method (also known as zero-based budgeting) can help you grow your money and make the most of all your pennies.

Here’s how to implement it:

1. Get the average monthly income above.
2. List all monthly expenses, including fixed and variable costs. Add your monthly savings target as a fixed expense.
3. Give every dollar a job. Prioritize important invoices, set aside money for changes in costs, and deposit your savings target amount into your savings account.
4. Track and adjust your budget as needed. For example, if you need more money for groceries, find another budgeting area that will decrease (such as entertainment).

*Pro-Tip: Create a “salary” based on the average monthly fee. Use this as your monthly budget Plan your savings goals accordingly. For example, you might need $3,000 a month to cover your expenses. If you earn between $2,500 and $4,000 a month, you will need to throw away your money in the high months to cover your debts during the low-income months.

We treat savings as expenses.

Again, when it comes to savings, it is very important to secure a certain amount each month and treat it as an unnegotiable expense.

Just like any other required debit, put it in your budget. Better yet, set up automated monthly transfers from your checking account to your savings account so you don’t have to think about it.

Open your Curve Ball account.

Add money to your curveball account and give it more financial security.

A curveball account is the second check that allows you to soak up payments of unexpected expenses, such as flat tires and emergency dentist visits. Emergency funds help you cover these surprises without immersing in a savings account.

If you haven’t opened a new account in a while, you may need to do so directly.

Here’s what you need to open a bank account:

• Your Social Security Number or Tax
• Government issued ID
• Proof of address
• Initial deposit

If you have a business check, you can call in advance to let us know which official documents you need to bring.

Depending on the financial institution you choose, you can open a second checking account by signing online banking.

Revamp your budget as needed.

Pay attention to your budget plan and improve if possible.

Make sure to do the following every month:

1. Please check the monthly costs.
2. Identify the area of ​​adjustment.
3. Decide whether to cut costs or increase income.

Next, create an action plan. For example, adjust the payments for savings automation or automatic invoices, or edit the variable cost allocation. For income, you decide whether you need to apply for a job, whether you need to carry out outreach calls or run advertisements to boost what you create.

Working from home has endless resources to make money from home.

Create a savings withdrawal plan.

At this point you will need a regular checking account, a Curveball checking account, and a savings account.

Regular checks should cover fixed and discretionary costs. Your curveball account should cover the surprising costs. And your savings account is there to help you during the “money desire.”

Make a plan for the latter.

This is crucial for your money growth, so you can live comfortably.

For example, if you have a budget of $3,000 a month and earn between $2,500 and $4,000 a month, you will need to withdraw $500 from your savings during the low-income months. If you have a low month of four months a year, you will need at least $2,000 in your savings account each year.

This means you’ll need to save $167 per month to meet your annual savings goal. Alternatively, you should save $500 for at least four months. It also means you need to earn under $500 from savings in low months.

Consider increasing your savings target and giving you more breathing chambers.

For example, $200 a month can help you add $396 a year in addition to $2K. If you bump up to $209 per month, you’ll have an extra $500 a year. $2,500 remains in your savings account. Just to be safe, we will provide 5 months’ worth of cushioning, not 4 months.

*Pro-Tip: If possible, create a new “zero” in your savings account. For example, you might imagine $1,000 to be “zero.” This means that once you reach $1,000, you will consider your account as “empty.” In this case, you’ll need at least $3,000 in your annual savings account. It costs $1,000 as a zero, and $2,000 to cover a low month. This will give you $1,000 extra cushioning if needed.

Let your money work for you.

Make money with your money by managing your expenses with care and opting for a high-yield savings account.

You can also meet with an insights advisor on family wealth investment and conservation, creating accurate budgets to support your long-term goals. This motivates you and gives you a great sense of purpose when you manage your money and save money.

Take advantage of the financial resources of female entrepreneurs.

If you are a female entrepreneur, there are resources (made for you only) that you can use to take more of your money.

It’s tempting to want to go on your own, but learning best practices can help you support and protect your business. You can also learn from other like-minded business owners. (You never know what new tricks are to help you move on.)

For example, think about it.

• Join the online financial resource group for female entrepreneurs
• Sign up for a financial newsletter created for women
• Attend a women-led financial meeting
• Hire a trusted financial advisor
• Read a book on finances
• Participate in the webinar

Set yourself for success.

Budgeting for irregular income requires a careful strategy, especially if there are unexpected costs.

It’s not a flexible process, but it helps protect you from getting into debt or falling behind on bills (like a nasty streaming service).

Don’t forget to average monthly salary and expenses, allocating expenses for each dollar, making emergency funds unnegotiable. Open a curveball account for emergencies and improve your budget as needed for discretionary spending.

By following the tips in this guide, you can ensure that your life needs are met and that you can cover important expenses (even if you wish for a few months). Don’t break the cycle even during periods where you earn extra income.

Check out our work resources at Women at Home for money management and other tips for making money. Also, check out Work on Home Job Board for a huge list from working from home.

This is your success!