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How to Best Budget an Irregular Income

Living on an irregular income can be stressful, especially not knowing how much money you will be making at any given time. It's time to stop this roller coaster and bring stability to your budget. Look no further as I show you how to do exactly that!

How to best budget an irregular income is one of the most common questions I get about budgeting, so today I am going to share with you five key tactics to help you tame this tiger and budget irregular income.

Don't Count Overtime

While it's nice to reap the rewards of your hard work, don't count on it. Overtime can be removed at any moment. Factoring it in as an expected part of your income, despite steady hours or reassurance from a boss, is setting yourself up for a false sense of security.

Don't Count Bonuses

Just like overtime, don't rely on those bonuses either. The exception here would be if your job is solely commission-based and all you get are bonuses and commissions. If it is infrequent from your regular income, you should definitely not count on it!

Average 1 Year of Paychecks

With those two previous tips in mind, here is what I recommend you do. Pull up the last twelve months of paystubs and average them based on your pay cycle. If paid monthly, that's twelve pay cycles. If paid bimonthly, that's twenty-six pay cycles. And, if paid every week, that's fifty-two. So, look at the stub (not the deposits in your bank account) to ensure you aren't counting overtime or bonuses and use that to determine your income. If you are still having difficulty determining an amount to best budget irregular income, reach back farther than a year. So, you've got your budget now!

Open a Retained Earnings Savings Account

Open a savings account that is not your emergency fund and use it for this specific purpose...

Every time you get a check higher than the average you calculated above, take the difference between the average and what you got and place it in this account.

Every Time You Earn Above the Average, Save the Difference

For example, if your average is $1,200 a pay cycle and you bring in $1,201+, then keep $1,200 for your budget and move the rest to savings. When you have a pay period below average, draw from this retained income to help you get through the low times.

Thing Long Term When Budgeting

When budgeting this income average, be sure to think long term. This helps keep your money working for you and avoids functioning under the fallacy of having extra money. Functioning under this fallacy means you aren't thinking long term and, instead, those future expenses will creep up and bust your budget. For more on this, check out my previous Savvy Saturday post, "How to Build a Strong Budget that Actually Sticks."


Need some additional help? Book a free consultation with me and we'll dive in together. Let me help you on your financial journey to find more money to fund your dreams.

Question: Do you have an irregular budget but don't quite have a handle on how to budget for it? Let me help. Contact me today!

I hope you found this information helpful. Come join my FREE Facebook community, the “Strong Together Money Community.” to stay informed and encouraged as you  manage and budget irregular income. Not sure how to break free of that cable bill without feeling like you're missing out? You can cut those costs and still keep your content! For more information, check out my Cable Cutting Academy today!


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Just a couple pieces of information and we'll have you on your way to saving an average of $200/mth!