How do I budget with an irregular income?

Step 1: Find your floor

Look at your income over the last six to twelve months and find the lowest month that wasn't a true disaster. That's your planning number. Building your budget on an average guarantees a shortfall in the bad months.

Step 2: Split your costs into must-pay and flexible

Your must-pay costs (rent, loan payments, utilities, insurance, basic food) need to fit inside your floor. Flexible spending only gets money in good months.

Step 3: Pay yourself a salary

Send every payment you receive into one account. On the same day each month, move a fixed amount from it to your spending account. You live on that fixed amount, and the holding account absorbs the ups and downs.

Step 4: Build the buffer first

• Aim for at least one month of expenses sitting in the holding account, then build towards three.
• Set money aside for taxes as soon as it arrives if nobody deducts them for you.
• Only increase your monthly "salary" after several months above it.

Step 5: Track income as well as spending

With irregular pay, knowing what came in matters as much as what went out. Log each payment so you can see your real floor and your true monthly average over time.

Doing it with Balance

Balance tracks income as well as expenses, so you can see month by month what you earned, spent and kept. Set up your fixed bills once and it shows what's committed before you plan flexible spending. You can ask questions like "how much did I earn last month?" or "how much did I save this month?"