How to Budget When You Don’t Have a Regular Paycheck

How to Budget When You Don’t Have a Regular Paycheck

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According to an article published by the Bureau of Labor Statistics, there are over 53 million people in the United States who consider themselves to be freelancers.

As any freelancer will tell you, one of the hardest parts about freelancing is managing your recurring income or learn how to borrow 300 dollars fast. It’s not easy to come up with a budget and stick to it when you don’t know how much you are making each month.

Freelancers aren’t the only ones with irregular income. Millions of Americans also work on commission structures which means their income varies from month to month.

Fortunately, there are ways to deal with irregular income. In this article, we’ll show you how people with variable income can plan their money efficiently without significant spending.

Keep Your Spending Fixed

Full-time workers have a fixed income and often have no fixed spending. This means they don’t keep track of their spendings. The average American spends $ 1.33 for every $ 1 they earn.

The trap many freelancers fall into is variable income and variable costs. This leads to serious frustration because you feel like you have no control over your spending.

The key to balancing your budget without extra spending when you have an irregular income is controlling your spending. You want to strive to keep your costs as flat as possible.

By keeping your spending fixed, you will know the minimum of what you need to contribute each month and be able to work towards the goal.

It is important to consider the hierarchy of needs when calculating your baseline spending. This hierarchy was a theory proposed by psychologist Abraham Maslow in 1943.

He argues that people have certain psychological needs which can be organized hierarchically. For example, you need to make sure you have basic psychological needs like food, water, and shelter no matter what.

From there, you can add things that are higher on the pyramid such as clothes and hanging out with friends.

Create Multiple Sources of Income

Another way to ease your budget and spending when you have irregular income is to have multiple sources of income. Don’t rely on just one project to attract you.

Instead, select multiple clients and create your budget based on the average amount you bring in a month at no extra spending.

Having multiple clients also helps you make sure your bills are covered when a client project ends or a deal fails. Knowing that you still have money even when the project is down can give you peace of mind as you learn to manage irregular income.

By truly understanding this and applying it, you ensure that your budget stays intact without significant spending.

Automate Minimum

When you have an irregular income, it can be difficult to automate all of your financial responsibilities like retirement and savings. You can at least automate the minimum amount you want to save each month without spending.

For example, if you know you want to invest at least $ 100 in an emergency fund every month, make sure you automate it. If you can save more because you’ve had a good month, that’s great! If not, then at least your minimum is covered.

Base Your Spending on Percentages

When you have an irregular income, it is sometimes easier to base your budget on interest. This is especially true when it comes to saving and avoiding spending.

The good news is that most people with irregular incomes already do this to some extent thanks to taxes. Your tax rate is a percentage based on the amount you earn.

Therefore, people with irregular income should already be putting that amount into savings with every deposit they receive.

Once that is done, you can take it one step further by also basing your windfall and retirement savings on interest. You can even do this for short-term financial purposes such as travel.

For example, maybe you decide to save 5% on every payment you receive for your next vacation. This method ensures that you save as much as you can, rather than just keeping it to a minimum and avoiding unnecessary spending.

Don’t Make Yourself Comfortable

Another trap many people with irregular income fall into is the convenience of getting a good check or a big project. This sometimes brings freelancers and contractors to the coast because they don’t feel financial pressure.

Still, this is a dangerous territory to enter. The reality is that the project can end and the money will be spent. This is the very nature of irregular income.

If you don’t remember this, you run the risk of getting too little money from the bank to cover your spendings at the end of the project.

The notorious feast or hunger cycle happens when contractors and freelancers get too happy with a project. The good news is that you are completely in control of this vicious circle.

You just have to make sure you never stop looking for a job. For people who work on a commission-based structure like a sales job, it’s like never challenging searches. Don’t do a big commission check and relax!

Prioritize Emergencies

Everyone should invest in savings every month. However, people with irregular incomes should pay special attention if they don’t want unnecessary spendings.

If you have an irregular income, your extraordinary savings could save you the next time you’re having a lean month. It also gives you more confidence that you have money in the bank to pay the rent the next time someone is late.

Reward Yourself

You need to plan your budget thoroughly in the face of unstable wages. But this does not mean that you cannot reward yourself for success at work.

After you have replenished your savings, taken care of your long-term goals, and covered the necessary living spendings, use some of the income to fund your desires adequately.

When the month is financially good, pamper yourself. Everyone needs positive reinforcement and motivation to be more successful.

Budgeting when you have irregular income can be frustrating. However, people with variable income need to understand that they have more control than they think.


Using these tips, people with irregular incomes will be able to pay their bills, save money, and use any rough fixes they may come across.


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