How to Create a Budget With an Irregular Income

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You know you need a budget but every time you sit down and try to work on one you probably get discouraged if you have an irregular income, right?  I understand how difficult it can be to create a budget with an irregular income so I want to show you a very simple way to do that will allow you to stop being frustrated and start working your way towards financial freedom!


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You’re not alone!  Irregular incomes are quite common.

In fact, over one-third of American households struggle with a volatile income across all income levels and all demographic groups.

Most people who work on commission or are in business for themselves have a fluctuating income.  Maybe you are paid an hourly wage instead of a salary and don’t have set hours each week?

It is still possible for you to create a budget and more importantly, stick to it!



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We had tried many times to budget with an irregular income but each time it got tricky and we would give up.

It wasn’t until we made the best decision taking this course that finally helped us create a budget that truly worked for us – giving us back control of our money and our lives!

Learning how to budget with an irregular income doesn’t have to be complicated but it does have to be strategic!

I want to share three different strategies to help you create a working budget that will allow you to get back in the driver’s seat of your finances, regardless of your fluctuating income!


To change the way I thought about money, I started substituting the word “money” with the word “freedom”.  All of the sudden, financial decisions were a no-brainer. 

– Whitney Cummings




Options are good…Below are three different options, choose the method that would work best for your specific situation and get to work on building that budget because you are officially out of excuses, my friend 🙂


How to budget on an irregular income - Life of Stones




In order to create a budget with an irregular income, you need to determine your baseline.  This is the base income you will use to build your budget around.

With the averaged income method you will take the average of the last six months of income and use that number as your base income for the month.

If the last six months have been a little higher than normal and you have reason to believe the next few months may not be as good, then extend the length of time you’re averaging to nine or even twelve months and use that number as your baseline.

Once you have your base income then you know what you’re working with.  Grab some free monthly budgeting worksheets below and fill in your expenses…



If the thought of using an “average salary” isn’t exactly making you feel all safe and secure then perhaps using your lowest possible monthly income is a better option for you!

Personally, this would be my choice since I’m slightly super neurotic and don’t want to take the chance that I could run out of money at the end of the month (been there, done that, don’t care to go back)!

Take the lowest income you’ve brought home in the last six months and use that as your baseline.  Using this method ensures that you will have enough to cover your expenses and more importantly, it’s great because anything extra you end up earning will feel like a bonus!  And, helllooooo, who loves extra money?  This girl!  I mean – and you.  #obvy

Now that you have established your baseline, continue on creating your monthly budget.



The last method I want to suggest is to live on “rice and beans” (as Dave Ramsey would say)  for a month or two until you save up enough money to bank a month’s worth of expenses!

This can be tough, especially if you’re currently getting out of debt by working your debt snowball; however, I think this method would be the most comforting and the stress-out-the-least-each-month (that’s the technical term) method because you are basically building your budget around the prior month’s income.

By using one of these three methods to determine your base income you can be certain that you won’t over/under-budget or overextend yourself during the month and come up short, forcing you to either use credit or dip into your emergency fund!




When creating your budget on an irregular income, if you have a month that might be short you will have to make a few adjustments.

You will have to prioritize your expenses.  I know that can be overwhelming but just remember, once you’re out of debt there should be plenty of money to cover every expense, every month!

Number your expenses in order of priority.  #1 being the most important – absolutely must be paid that month.  A good example is the basics: shelter, utilities, food, and transportation.  So all essential expenses pertaining to those categories should be the first few numbers.

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Next, number the rest of your expenses accordingly.


Hint: now is the time to make good, honest choices.  Changing your behavioral patterns and creating new habits are essential to success in budgeting!


When the money comes in you pay your expenses starting at #1 and go down the list until the money runs out!  It’s as simple as that…whatever does not get paid must wait until you bring in more money.

Do not put the remaining expenses on a credit card

I want you to move forward, not back!  Work harder next month to increase that income and pay right down the list again!


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  • Be sure to check (and update) your budget often.  Pay raises, bonuses, new clients, etc. can all make a huge impact when you budget with an irregular income.  Be sure to fill in the “actual” column each month end.  This will help you see where you may need to make some adjustments for the upcoming month!


  • Try a budgeting app!  While I do prefer a spreadsheet or an old-fashioned paper budget, there is something to be said for using a budgeting app like Every Dollar (it’s free!).  It’s very convenient to be able to check your budget quickly on the go or easily plug in what you’ve spent before you even get home to your computer!


  • Be sure to utilize a spending management system to help you stay on budget.  I highly recommend the cash envelope system!


  • Remember, once you have your budget set up, the first order of business would be to save up a starter emergency fund of $1,000 as fast as possible to be sure you are prepared for any emergencies that might occur!


Bottom Line: When it comes to creating your budget with an irregular income, don’t overcomplicate it!

It can be easy to get yourself stressed out about what your upcoming paycheck will look like and whether or not it will be enough.

Following these steps will ensure you and your finances are prepared for your fluctuating income and will help you keep calm and budget on!

I hope this article helped clarify some things for you, I know it can be overwhelming but when you break it down step by step you can easily create a budget that will help you regain control of your finances!

Do you currently use any of these budgeting methods for your irregular income?  I’d love to hear any other suggestions you might have!  Don’t forget to sign up for the FREE Begin to Budget 5-day email course to jumpstart your financial makeover today!

Did you enjoy this post? I would be so grateful if you would share it with your friends and family! Have some feedback? I love reading your comments…please keep it positive!

Ready to love life on a budget?

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Creating and sticking to a budget is what helped us pay off $35,000 in only 7 months! (and we don't make a lot of money) A budget is simply telling your money where to go! And it is the key to your financial freedom!


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  1. This is so great! Budgeting has never been a strong suit of mine and triply so now that we’re a single income home. While I am working on my side hustles, they are still inconsistent that it is going to take lots of practice.

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