Welcome to my blog. I document my adventures in travel, style, and food. Hope you have a nice stay!

How to Budget with an Irregular Income

How to Budget with an Irregular Income

As many of us digress away from the 9 to 5 jobs, and look to go out on our own, we face new challenges. Nothing bad, but a new opportunity to educate ourselves on a different way of earning and living.

Life as we know can be unexpecting. One day we can have a secure job, great health and be surrounded by family and friends — then tomorrow things can change entirely.

For that reason, I am noticing that many more Millennials are taking the leap and branching out on their own. Whether it be doing contract work instead of being employed (Builders, Accountants or Personal Trainers), creating your own Start Up, having an online platform such as an online store or moonlighting (Kate Darby, Founder of Dovetail X has an interesting article on moonlighting here.) Being your own boss offers greater flexibility and control — which has numerous advantages and of course, life’s about living right!

Today let’s highlight the new challenges. People earning a living through any of the above ways can experience the struggle of having to cope with irregular income, which is income earned at different amounts or times or both — on a regular basis. The best way to live on a fluctuating income is to be in control of your finances and to really know where your money once earned is going.

Here’s a few tips to help you with the transition

Sacrifices. You’ve made the choice for a new life and a new way of earning. You’ll now have new priorities.

Becoming successful doesn’t happen overnight. It’s going to be hard work and will take time to build a regular income. Don’t be ashamed or scared to scale back your budget. Set your priorities based on building your business in the short term. It’s not the end of the world to forgo the weekly catch up at your local pub, or being up to date with the latest fashion trends. Talk to your friends and family, and let them know these short term financial priorities — I can assure you that they will be supportive, and opt for fun free activities too.

Live on Last Month’s Income

Instead of trying to guess what you’re going to make this month and budgeting off of that projection, use your actual earnings from last month to set the limits for your spending this month.

Know your budget

It’s hard right, sometimes “things” pop up and then bam! Your monthly budget has been well exceeded. Let’s look it at from a different angle — What’s your Make or Break Number?

In simple terms: How much, at a minimum, does it cost to run your life each month?

To calculate this, let’s start with your Monthly Non Negotiables. These are costs that you wouldn’t be able to live or work normally without e.g. housing, food (excluding Avocado), insurances, transportation, business expenses, etc.

Remember to include any irregular (but necessary) expenses in your monthly non negotiable list.  An annual tax bill for example, you would divide by 12. A quarterly insurance payment, divide by 4, a annual Square Space membership, divide by 12.

Once you’ve got this figure, let’s add a wee buffer. Take your monthly cost and add at least 10% — Life is always more expensive than we anticipate.

Now consider any other monthly financial goal targets. Are you just wanting to stay afloat when you are first going out on your own, or do you have long-term financial goals? How about paying off that student loan debt? Or hitting a retirement savings target? Saving up for a down payment on a home? Or planning a vacation next summer? Maybe all you are wanting is to make some moolah to reinvest into your business? — If you’re serious about saying goodbye to the 9 to 5 lifestyle, then realising and striving towards any monthly financial targets should be a priority.

Know your numbers, write them down and get grounded so you can achieve your goals and stay afloat as your own boss. If you find that you’re struggling to meet your monthly targets, then you have two options — reduce your non negotiable expenses and/or increase your earnings.

Try Zero Sum Budgeting

Using the non negotiable strategy means your budget is rather flexible. If you earn past your make or break point, you are winning and can spend what you like.

Feeling like a wee challenge and structure — then consider zero sum budgeting.

Here’s how it works — write down your last month’s income on a piece of paper, then subtract your non negotiable budget total cost.

With the money left over, you’ll allocate each dollar for additional spending, until you get down to zero, with every dollar accounted for.

For example, if I earned $2,800 last month and my monthly non negotiable total is $1,500, I now have $1,300 to designate between my “wants and my goals”. I then break it down further, for example, $200 to my emergency savings fund, $500 to house savings, $100 to the vacation fund, $200 for entertainment, $200 for paying off debt and $100 for reinvestment in the business. These calculations should all align with your financial goals — Have a read about the importance of financial goal setting here. By accounting for each dollar, you are much more likely to not overspend on those goods you don’t actually need.

Use an App

If nothing else works, then use an App! If you are already running your business through an Accounting Software like Xero, then you will see you have options to create budgets and compare these to your actual income and spending!


New Priorities and Sacrifices — You’ve made the choice for a new life and new way of earning, don’t be ashamed to down scale your budget.

Patience — We weren’t taught how to budget or handle finances at school. It can take anywhere from 3 to 6 months to find a system that works for you.

Build a Healthy Emergency Fund — If you are considering the transition into self employment, consider changing your lifestyle while you’re still employed. Build up an emergency fund in case things don’t start out as smoothly as you’d hope for. Remember that an emergency fund isn’t for a treat yo self moment — it should only help when you can’t make your break even number.

Know Your Break Even Number

Live off Last Month’s Income

Try a Zero Sum Budget





How To Crash Course Your Savings

How To Crash Course Your Savings

A Second Home? Property Investment Explained

A Second Home? Property Investment Explained