Welcome to our final budgeting challenge: irregular income! If your earnings vary month to month from freelancing, commissions, or seasonal work, traditional budgeting feels impossible.
But don't worry - you can still create a stable, effective budget with the right strategies.
Engagement Message
Do you have irregular income?
The key principle for irregular income budgeting is using your lowest earning month as your baseline. If you earned $2,000 in January, $4,500 in February, and $1,800 in March, budget based on $1,800.
This conservative approach ensures you can always cover expenses, even in slow months.
Engagement Message
What was the dollar amount of your lowest-earning month last year?
Apply the 50/30/20 rule to your conservative baseline income. Using the $1,800 example: $900 for needs, $540 for wants, $360 for savings/debt.
When you earn more, the extra money goes to a buffer fund, not increased spending habits.
Engagement Message
Does basing your budget on the lowest month feel restrictive or strategic to you?
Build a monthly buffer equal to 2-3 months of expenses. This buffer smooths out income dips and prevents panic during slow periods.
When income is high, add to the buffer. When it's low, draw from the buffer to maintain consistent spending.
Engagement Message
How many months of expenses could you currently cover with savings?
Consider weekly mini-budgets within your monthly framework. If you earn $800 one week and $200 the next, you can still stick to your envelope limits by averaging over the month.
This prevents feast-or-famine spending cycles that destroy budgets.
Engagement Message
Do you currently spend more in high-earning weeks than low ones?
