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7 Ways to Budget and Thrive With an Irregular Income
7 Ways to Budget and Thrive With an Irregular Income
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7 Ways to Budget and Thrive With an Irregular Income

Eunniah Mbabazi
August 23, 2021

How possible is it to budget with an irregular income? Take for instance, you are a  contractor, freelancer, or self-employed. You seldom get regular income every two weeks. Instead, you receive sporadic payments at random intervals.

Sometimes you make twice as much as what you made in the previous month. Some months you make half of what you had made in the previous month. How possible is it to create and maintain a budget with all this randomness? Here are some tips to help you manage.

1. Identify your baseline

If your income is not regular, you should set up a budget. What’s the most amount that you made in a month? What’s the least amount that you made in a month?

This budget should be based on the lowest estimate of your monthly income. It’s easier to start with a lowest amount than to start with an average or the highest. Reason for this is because if you make a budget on the smallest amount, you can always and easily go up from there.

To find this figure, look through your pay records from previous months and find the lowest you can find in the bunch. If it is your first time working on commission or getting by on an irregular income, estimate what your lowest month might look like. That is what you should put in as your monthly income when you create your budget.

2. Cut down your expenditure on wants

Having created a budget based on your baseline, you need to make a list that encapsulates everything else. In this list of discretionary expenses, you need to account for things like your pay TV, any money you constantly spend on entertainment, money for hobbies or sports, and money you spend when eating out.

If it is a struggle for you to find your average expenditure on unnecessary things, review your bank and/or mobile money statements from the last few months. 

Sometimes, taking a hard look at your spending from the previous months might be all it takes to discover the huge, painful loopholes in your spending. If what you see does not make you happy, now is probably the best time to embark on a spending diet and cut those numbers down.

3. Focus on Needs

Having created that budget based on the least amount of money that you have earned in a particular month, it is very necessary that you be careful not to leave out any of your necessities. Start listing all your expenses in the order of most important to the least important.

Necessities, by definition, are the most essential things on your list. They may include food, rent, water, electricity, and other things that you cannot reasonably live without. On the other hand, discretionary spending are expenditures of least importance on your list. It’s these expenses that you’ll have to cut if you’re attempting to make your budget fit your income.

3. Build a Large Cash Cushion

If your income is irregular, you have to create a large cash cushion. By maintaining a balance of a few tens of thousands of shillings left stashed in your account, you will have some ability to cope during the months when there’s a slowdown in jobs or when your customers are slow in paying you.

A cash cushion is just to make sure that you can pay for all your bills awaiting for your sporadic and irregular income to come by. 

5. Build an emergency fund

An emergency fund is a separate account. You can’t touch this account unless the worst-case scenario unfolds; a month or two have gone by without any income at all. This will also serve in case of huge emergencies such as a medical emergency, or a fire, etc.

6. Budget Every Check or Payment

When it is pay day, split up the check or earning based on your budgeting categories. 

Take the 50:30:20 budgeting rule, for example. With this you would’ve decided that you are willing to spend 50% of your money on essentials, 30% on your desires, 20% on savings or debt payment. However, if you decide to cut down on your wants, having the extra put in savings is a very desirable option. 

Right after getting a check from a client, split the check into the appropriate categories. By dividing every check you get, you can ensure that your budget fits in with your ideal percentages.

This is also to say that you aren’t going to run the risk of flushing 50% of your money on discretionary spending and not having sufficient left over for groceries.

7. Set Your Financial Goals

Have a plan for the extra money you get. If you don’t have one, create it. Remember, you are budgeting based on the least amount of money that you’ve earned in the past months.

If you do not create a plan for what you are going to do with the excess income you have, you run the risk of blowing it. Whether you want to save up money toward buying a car in cash, whether you would like to save college funds for your children, whether you want to build a huge retirement savings account or put the money toward paying off debt.

Have your goals and set aside all of the excess money toward them. Learn more about financial goal setting here. 


A fluctuating income can make budgeting feel more like a chore. The tips above are a great way to begin getting around it. Using these methods can help you be more in control of your money by getting a close eye view of your spending, and with this, inch closer to attaining financial independence.

The process can be a little tiresome and maybe painful but you will definitely get a hold managing money.

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Eunniah is an experienced business writer and editor. She is also a published author with two titles under her belt; Breaking Down and If My Bones Could Speak. You can find Eunniah on Twitter @Eunnyversal

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