How to Budget on a irregular income |31 Day Budget challenge

How to budget on a irregular income



Welcome back to the 31 day budget challenge! If you are just joining us, be sure to visit the older posts at the end of this post.

How to Budget on a Irregular Income

Budgeting a fixed salary is fairly easy, but learning how to budget an irregular income presents a few challenges. Irregular incomes can be the norm for hourly workers, small business owners, and independent contractors. If you take a few simple steps, you can ensure that you are able to pay all your monthly bills and still have money left over.

Save when Times are Good

If you have a month when you make more than you anticipated—you get overtime hours or sales are particularly high—be sure to put a chunk of that extra income in your savings account. It can be tempting to use that money to go shopping or pay off bills, but you never know how the next month’s income will be. If you put at least 40 percent of the unexpected extra income in your savings account, you will have emergency funds ready for a slower month.

Enroll in Budget Billing

Utility bills can be tremendously unpredictable, but many companies offer budget billing programs. These programs allow you to pay a fixed rate all year long. You won’t have a surprise bill, and you will always know how much you need to pay ahead of time. This comes in handy when you have a month if lower wages.

Determine Your Monthly Expenses

If you know how much you need to spend on your mortgage or rent, utilities, car payment, and credit card payments, it is easier to figure out how much disposable income you have with each paycheck. All too often, people pay their bills without noting how much is being spend every month. Use the Monthly Cash Flow worksheet to help you determine where your money goes each month. Once you review your budget, you can look for places to cut costs so that you can still pay all your bills—even when you aren’t making as much as you might like.

Pay Down Your Debt

After you put money in your savings account with each check, look to see how much you have left that can be put toward paying down your debt. The lower your credit card balances are, the lower your monthly payments will be. Use extra money to pay down those balances so you won’t have as much to pay during lean months.

Those with irregular income should make an emergency fund a top priority as  you never know when your next unexpected expense could cause a financial hardship.

Learning how to budget an irregular income may seem difficult at first, but with a little planning, you can make sure that you always have access to the money you need when you need it. Curb your spending when you have lots of money in the bank, and you won’t have to worry when those smaller paychecks arrive.

Pay yourself like you are earning less

Find your lowest paying month after expenses and live off of that amount for the months to come. Let’s say you earned only $3000 per month during the month of January which is your lowest earning month for that year– Let’s say you earn more during the rest of the year– if you “pay” yourself just $3000 per month regardless of what you earn and stick the remaining balance in a savings account-you will pay yourself like you are earning less and won’t have to dread those low paying months!

Enjoy the other 31 budget challenge posts:

post 1: 31 Day Budget Challenge | 3 Reasons being disorganized can ruin your budget

post 2: 31 Day Budget Challenge | Creating a budget that works

post 3: 31 Day Budget Challenge | 100 ways to save $100 this month

post 4: 31 Day Budget Challenge | 7 Ways to stick to a budget

post 5: 31 Day Budget Challenge | stay on budget using cash

post 6: 31 Day Budget Challenge | The #1 reason why your budget isn’t working

post 7: How to Start an Emergency Fund | 31 Day Budget Challenge

  • cozycoupon says:

    Thanks Josie, these are very helpful tips.Bless you for taking the time to share this with us! Using coupons can save a lot of money off my grocery bill, in return I must learn to make sure to put that amount in the bank.

  • Dee says:

    Thank you for this information! Where can i see or get all of the 31 days to budgeting plan?? I have missed a couple posts 🙁

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