YNAB tree logoAustralian flag
It looks like you're located in Australia.
We have an Australian version of our website.

Please confirm your location and we’ll send you to the appropriate site!

How to Manage Money With Irregular Income

If you’re trying to figure out how to budget with irregular income, we’ve got the solution for you.

We can’t change the fact that you don’t know exactly when or how much you will get paid, but we can teach you to be in total control of your money, and stop stressing about it! This eight-part series will teach you exactly how to budget successfully and meet your financial goals despite your irregular income.

You’ve got a good thing going. Maybe you sell real estate, (or subscriptions or packaging or pharmaceuticals), or you own your own business or take pictures or design websites or write copy. Some sort of job that involves fluctuating income. 

You work hard—there is no doubt a lot of hustle involved—but you also have a lot of flexibility. Sometimes you can’t really believe that people pay you to do the thing you love, or use the app you developed, or that the more you sell, the more you’ll earn.

It might have seemed a little wild to the very responsible 9-to-5 people in your life, but you’re doing it. And it is a little wild. Especially the part about never knowing exactly what amount of money you will make or when that income is received. Yeah, it makes creating a budget to meet your monthly expenses more challenging. 

But you keep telling yourself, you are living the dream. At least part of the dream? On some days? Because the rest of the time you are just plain stressed. Well, anxious and stressed.

And it’s probably not the work. It’s the money—or lack thereof—or maybe just the not knowing about the money and the waiting for the money. Or the flaky clients, late invoices, and unexpected expenses. Sound familiar?

The Irregular Income Rollercoaster

It isn’t just you. Living on an unpredictable income is a wild ride. The highs are high (So much work! Big invoices paid on time! New business! Extra money! Feeling rich!) and the lows are low (Uncertainty. Doubt. Fear. Feeling stuck and poor. Dwindling emergency fund. Credit card debt. So poor. What if you never get another job again?).

Or maybe you work seasonally, and a few large expenses blindside you just as you transition to your slowest months.You’re stressed about money just about every minute of the day—and night, because you can’t sleep when you are stressed about money.

Why did you ever think this would work?

Because it can. Once you understand how to tame the irregular income beast.

Oh, and also, once you accept, love and honor the all-knowing power of living a budget-based life. 

Don’t Believe The Irregular Income Hype

The problem is, someone probably told you that budgets don’t work with irregular income, and you believed them. Or maybe your own experience has made you quite sure that “irregular income” is synonymous with money stress. You’ve tried to forecast. You’ve tried to budget. Nothing has worked.

The good news (yes, there is good news!) is there are a couple of simple reasons why what you’ve tried in the past hasn’t worked. And better yet, some very specific solutions you can put in place to change your relationship with your money, giving you more control of your finances and your business than you ever thought possible. Also—bonus!—the best sleep of your life.

Learn more about small businesses and budgeting with the Budget Nerds.

Everyone Needs A Budget—But Especially You

Let’s get this straight—everyone needs a budget. But you–you and your variable income–need one even more.

The budget will help you to flatten out the highs and the lows. The budget will give you boundaries so you aren’t always guessing. The budget allows you to save money, plan for the future, and position yourself to take calculated risks. The budget will give you the confidence to make better decisions. The budget will ensure that you can eat in all the months, not just the good ones.

If your budget hasn’t worked/isn’t working, it’s probably because:

1. Your Budget is Set in Stone.

Talk about a budget, and most people imagine something you set at the beginning of the month (or, worse, the year!) and then twist yourself in knots trying to match it. Or else you failed. Everything in your life changes week-to-week and day-to-day, why pretend a budget is different? Budgets can and should be flexible.

2. Your Budget Is Built Around Anticipated Income.

Budgeting money you don’t have yet is like a farmer promising exact deliveries of crops to his neighbors the day after he puts seeds in the ground. It doesn’t work. Instead, he should wait until the crops actually grow, then take stock and divvy them up appropriately. What you actually have is different from what you think you might have.

A budget that replicates itself each month without thinking or a budget built on a hopeful forecast of what money might come in is, at its best ineffective; at its worst, downright dangerous—especially with variable income.

Not Just Any Budget

You need a budget that is as nimble and adaptive as you are (or hope to be). You need a budget that works with the amount of income you already have in hand, and that helps you prepare for your future plans.  And the things you don’t know about yet. A budget that puts you in the driver’s seat.

Over the next eight posts in this series, right here in this space, we will teach you how to build and maintain a flexible budget that will become one of your greatest tools. Your business—and your life—will never be the same.

In the meantime, ask yourself, “What would I do with my career or my business if you weren’t always stressed about money?”

Next: Part 2: How to Make Spending Decisions When Your Income is Unpredictable

Have you been believing the "it's too hard to budget with irregular income" myth? Take the first step towards changing your life with a free trial of YNAB!

Related Articles
How to Manage Money With Irregular Income