4 Success Tips for Budgeting with a Variable Income

Feb 25, 2021

So, maybe you don’t make the same amount of money every paycheck. Freelancers, self-employed individuals, and salespeople all have this in common. If you’re one of them, you probably know the struggle of budgeting and saving your money given your fluctuating, and sometimes even unpredictable, income.

How do you make sense of all the madness of not knowing when you’ll get paid and how much you’ll be earning? As crazy as it sounds, there are strategies available to help you budget your money effectively despite having a variable income. Here are four practical tips you can do to manage your money, according to one of the best personal finance blogs online.

1. Establish Your Baseline

First things first, you need to establish a baseline, which will be the basis of your budget. Treat this as your bare minimum budget so you can get by with your fluctuating income. Get the total amount of all your expenses so you can get the minimum amount you’d need to earn each month. Expenses like rent or mortgage, food, utilities, and transportation should be included here. Don’t include what you spend when you’re going out, shopping, or doing recreational activities or entertainment. This should be the bare minimum, meaning you include only the things you need to survive.

2. Prioritize Your Expenses

Now that you’ve nailed down your baseline budget, the next step is to prioritize your expenses in order of importance. For example, your housing, food, and transportation expenses should be the first three items on your list. This lets you see if you’re properly allocating money to your top budget items first whenever you get paid. So, when the low months come and your paycheck doesn’t cover everything in your budget, at least you’re able to pay off your top budget items, which is what matters most.

3. Plan for Future Months

If there are slow months, there are times when you get more than enough money for you to get by. This isn’t the time to splurge on what you missed out on in the previous months. If you happen to earn more money in a certain month, continue paying for your top budget items as you usually do. Then, set aside some money as your emergency fund. These savings will help you move forward, especially in the months when you don’t get paid much. 

Building your emergency fund now becomes your second priority right after your top budget items. With some savings put aside, you’ll be able to cover your expenses on low months without having to leverage debt.

4. Pay Yourself a Salary

Since you’ve already established just how much you need every month to get all your bills, utilities, and necessities paid, pay yourself a salary that amounts to your baseline budget. Any money you get above that salary should automatically go into your savings. Essentially, you’re turning your variable income into a predictable salary income. All of the excess money should go to your emergency fund or even use it to invest in a profitable venture, so you get additional passive income. Investing with no money isn’t possible, but since you’ve earned a little extra, you might as well put it to good use.


Once you’ve followed all these tips to the letter, just repeat the process every month for the foreseeable future, and you’ll be good to go. Your variable income won’t feel as unpredictable as it was before you started doing all this.

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