How to Budget With Inconsistent Income That Is Unpredicatable

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    4 Ways to Budget With Inconsistent Income

    1. TJ says:

      Tracking your spending is so simple now with the free aggregators, that there really is no excuse to not at least have a general idea of where your money is going.

      I feel like I generally have a pretty good handle on it, but even being a super PF nerd, there are still times when I get caught by surprise that I actually spend $X on last month on Z thing,. So no wonder people who aren’t remotely interested in PF get frustrated with it.

      Irregular income is super scary. I’m headed there next year, but certainly will have a solid cash + bond cushion. :-O

    2. Nice tips Stefanie. There are certain members of our family who flat out refuse to budget (and everything similar) as they have very inconsistent income. They are the ones who could benefit most from your tips!

      If only they’d listen/learn.


      • Stefanie says:

        It’s definitely a tough to see friends/family struggling with their financial life and refusing to be proactive. One thing I’ve come to terms with is the fact that people have to want to make that change on their own time.

    3. Really great resource you’ve put together here, Stefanie! I’ve virtually ruled out running a business full-time until my wife is done with grad school, but there are clearly millions who make it work with inconsistent income.

      • Stefanie says:

        With the rise of the gig economy and more people managing inconsistent income, it will be interesting to see how the PF/financial landscape changes.

    4. giulia says:

      I was talking with a friend of mine that we need to manage at least 2 jobs at the same time to have a decent salary…in the past 20 years salary kept the same while tax increased, so sometimes is necessary to manage multiple jobs, but having a budget and understand priorities could help to manage every kind of budget…

    5. Julie says:

      Totally agree with the make it or break it number. You really have to know what your total bills are to know what you need to cover it.

    6. Natasha says:

      Great tips Stefanie! I cannot wait until my business is at this place where I have to manage inconsistent income as I now also have a full-time job. Great piece!

      • Stefanie says:

        Calculating your make or break number will give you a sense of how much you need to start making through your biz to quit your job too!

    7. Ms. Montana says:

      These are such great tips. I see a lot of people throw in the towel because they can’t figure it out. I worked a 100% commission job for a while, and hated the stress of starting over every month. Keeping a cash cushion was key! We didn’t get paid till items were delivered, which could be weeks or months out.

      • Stefanie says:

        Same here. It can take weeks for me to get paid. I only count income that’s actually arrived in my bank account for a given month, not work I’ve done.

    8. Karol says:

      I tried to use some apps to help with that… but it still needs some effort to keep it effective. Nice thoughts anyway in this post!

    9. Great point about having a healthy cash cushion! Not having an emergency fund is certainly a recipe for disaster. It’s important to have for someone earning a consistent income, more important to have for someone earning an inconsistent one!

    10. Latrisha says:

      This is such a great post. Super helpful and easy to understand. Thanks for sharing!

    11. Raj says:

      Nice tips Stefanie, I must say your analogy is definitely apply for financial needs and spending of an Individual. It will be good to know your passive and active income before spending all of it without making any proper plans which might leads to financial unstability.

      I always prefer using an applications to track your expenses and make a proper plan out of it.

      Nice post and keep writing great stuff,

      Have a good day!

    12. Gustav says:

      The zero sum budgeting concept works well with your income variation and also very well for salaried individuals. There’s a software called “You Need a Budget” that teaches that concept and it’s very effective. A good method to be debt free as well. (I’m not an affiliate of the software, but like it because it works) Good article.

      • Stefanie says:

        Thanks for sharing Gustav. I like the zero sum budget because it grounds me when I feel I’ve gotten a little lax or out of control with my finances. Staying accountable by designating every dollar keeps my money mindfulness on track.

    13. I had an extremely inconsistent, hourly job right out of college. My budget revolved around my set expenses, like my car payment and rent. Then “flexible” expenses like utilities and groceries were monitored very, very carefully. Out of fear I would squirrel away $20 a month for savings, since that’s all I could afford. It hurt because that $20 was half a week’s worth of groceries, but I made it happen with an inconsistent income. If I had surplus money at the end of the month, it went straight into savings.

      As it turns out, I later went a month without a paycheck and my meager savings saved my ass.

      I think it’s especially important to prioritize savings when you don’t have a regular income. You just don’t know what could happen.

      • Stefanie says:

        Your prioritization of your savings is SO impressive. Unfortunately, I think many individuals use inconsistent income as an excuse for NOT saving, rather than as motivation to save MORE.

    14. PinchThePennies says:

      I found that it works better for me if I divide annual bills by 11 (months) as the bill is due in month 12. It does push the monthly payment a bit higher but you’re certain to have the full amount needed in good time to pay the bill immediately when it is due to be paid.

      Regards, Pinch

    15. Thank you for the very easy to understand article on budgeting. This is one of the most important money management tools we can do for ourselves and yet we don’t do it. I have tried many times to set up a budget. I don’t have a regular income and have never been able to figure out budgeting because of this. Thanks to your article I think I will give it another shot.

    16. Kansas says:

      I would say the most important is make knowing your “break or make number”. Going over the amount you can afford each month is what puts a lot of people in debt. Using credit on things they can’t afford.

      • Stefanie says:

        Agreed. If you don’t know your essential cost of living, it’s going to be hard to know how much you can afford to spend on everything else!

    17. Nice post and keep writing great stuff,
      Thanks for sharing

    18. Jessica says:

      While it’s never too soon to reassess your spending habits, cut costs, and start a savings fund, there are certain moments in a person’s life where you may find yourself at a financial crossroads and realize that you have to make a change, or risk ending up in severe financial hardship.

    19. M. Otis says:

      Great content! I love zero based budgeting.

    20. Margaret says:

      Hi, Stefanie – Do you Have tips/strategies for making that initial transition from projected income budgeting to budgeting based on last month’s income? Perhaps I’m overthinking it but I’m unsure of how to make the switch without putting spending on hold for one month—please explain?

      Thanks for such an informative and accessible post, loving your blog!

      • Stefanie says:

        Hi Margaret, let’s use today, October 1st, as an example. So to create your budget for THIS month, take a look at your income from last month, September and use that as your benchmark for planning. Let me know if that makes sense 🙂

    21. Gary says:

      Stefanie, this article is great!

      I have had to show this article to so many different people!

      I know a bunch of young entrepreneurs who live with such inconsistent income, this article has helped myself, as well as my friends!

      Thank you so much!

    22. Moneygelt says:

      Absolutely very effective budgeting method. Keep it up. Thanks a lot for giving us such an informative writing.

    23. thanks for sharing such important information with us.

    24. Been There Done That says:

      From years of variable income: budget with last month’s income and the make or break number. I call any income beyond that number Deferred Income and keep it in savings. It,s there for me when I have a low income month. If it stays long enough, I know it’s safe to allocate it to other goals.

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