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How to Budget with an Irregular Income

Updated: Sep 22, 2020

As young adults and college students, we are more likely to have an irregular income and have to adjust our budgets each month to keep up. Here are a few tips and tricks to make budgeting with an irregular income a lot easier.

Tip #1

Use the percentage-of-income budgeting method

This budgeting method allows your budget accounts to proportionally move with your income from month to month. 

  • Determine what percentage of income you want to allocate toward each budget

  • Use the same percentage each month to calculate your budget amounts

Tip #2

Use your lowest possible income estimate when creating your budget

If your income fluctuates at a high rate and can drastically vary over time, it is best to create budgets based on your lowest possible income.

  • Setting your lowest income as your base number for your budget will ensure that your expenses can always be paid for no matter how much your income varies.

  • Doing this will increase your financial security and make sure you are living within your means.

Tip #3

Build an emergency fund!

Emergency funds are essential when working with an irregular income. The money you save in the months where you income is higher than average, will help fund the months where your income dips below average. 

  •  high income month = put money into emergency fund

  • low income months = use emergency funds for emergency expenses


Month 1:                                            Month 2:

Income: $3,500 (high month)          Income: $2,500 (average month)

Expenses: $1,200                             Expenses: $1,200

Savings: +$1,500                             Savings: +$1,000

=> Emergency fund: +$800             Emergency Fund: +$300

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