Skip to Content
artist learning how to budget with inconsistent income

Most advice on budgeting makes the assumption that you’re working with a set amount of  income each month. But what if you’re not? People who are self-employed, freelancers, artists, or whose income relies heavily on tips and commission are all subject to inconsistent income that fluctuates from month-to-month.     artist learning how to budget with inconsistent income

If you fall into any of those categories, should you just forget budgeting, cross your fingers and hope for the best? Absolutely not! In fact, because your income is unpredictable, it’s that much more important to understand how much you need to make each month and how best to handle those times you might fall short, as well as what to do when you come into a financial windfall.

Establish Your Baseline

When your income is inconsistent, it’s vitally important to establish what your monthly expenses are. Remember to account for housing, food, transportation, insurance, utilities and any regular monthly bills you have. Knowing the absolute minimum income target you have to hit each month is the place to start. Our Household Living Expenses Calculator can help you break it down.

Look for Ways to Cut Expenses

Once you determine your monthly expenses, look for ways to lower them, or even eliminate certain ones altogether. Is the cost of a car payment, plus the insurance, gas and maintenance taking up too much of your income? Look into using public transportation or ride sharing. Are you spending more than you’d like to on utilities? Find ways to cut your consumption, or ask your provider if they offer an equalizer plan that averages your costs over a year so your bill is the same each month, rather than spiking seasonally. Be creative and turn cost-cutting into a game.

Account for Variable & Periodic Expenses

It should be relatively easy to nail down your monthly expenses. But don’t forget to plan for those expenses that only come around occasionally or even just once a year. They can really throw things off if you’re not ready for them. Remember to account for things like annual vehicle registration, back-to-school expenses, and buying gifts for birthdays and holidays.

Start Saving for Emergencies

While it’s important for everyone to set money aside for emergency expenses, it’s even more vital to do so when your income is irregular. You may need to dip into it more often just to pay your regular bills in case your income falls short.

Use Extra Money Wisely

You’re going to have some great months where you make much more than you expected. It will be tempting to splash out and treat yourself, but it’s a better idea to set that money aside to help you through the lean times.

Need more help establishing a budget with inconsistent income? Our free credit counseling can help.

Related Posts

Throw a New Year’s Eve Party on a Budget

Ringing in the New Year surrounded by family and friends is always a fun way to wrap up the holiday season. But by the time December 31 rolls around, most people’s holiday budgets are all but maxed out. Does that mean you have to sit home alone and hit the hay before midnight? Heck, no! […]

Read More

The Fundamentals of Building a Credit History

Establishing and maintaining a positive credit history is necessary to reach a number of important milestones, including buying a vehicle, purchasing a home and financing an education. Yet, many people don’t understand the basic building blocks of a credit history. Let’s take a look at the fundamentals of building a credit history.    Managing a […]

Read More

Do You Need Renters Insurance?

For many folks renting housing, renters insurance is simply not on the radar. They assume their landlord will manage any issue with their apartment or rental. It’s common to think if the air conditioning goes out, my landlord will fix it. If there’s a fire in the building, the landlord will reimburse the cost of […]

Read More
Font Resize

Call 866-528-0588

Or schedule a call now
Please complete the required fields to continue.
Now Later