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How to Budget For Irregular Income (FYI…We Should ALL Learn This)

budget for irregular incomeYour paycheck this week? $100. Next week? $800. And the week after that? Could be $500. Who knows? The point is, your income is all over the map and you’re having a rough time knowing if you even have enough to pay the bills, let alone put money into savings or investments. But don’t worry, you’ve come to the right place. We’ll teach you how to budget for irregular income. Pretty soon, you’ll be a master!

How to Budget For Irregular Income

This post is most useful for self-employed people that receive unknown amounts of money from week to week and month to month, but understand that this IS NOT ONLY for self-employed individuals. It’s for all of us, because you know what? We all have an irregular income from time to time.

We could have…

  • a side hustle income,
  • tax return money,
  • an unexpected monetary gift from a relative,
  • an inheritance,
  • a lump-sum settlement,
  • the sale of property…

At some point in our lives, ALL OF US will receive an irregular income. And, unless we think ahead about how we’re going to treat it (spend it? save it? invest it?), we’ll probably just piddle it away and never even really know where it went. 

Don’t do this. 

Instead, be intentional about your money. Read this post and be ready for some irregular income so that when it happens to you, you’ll be ready and immediately make wise, intentional decisions.

Follow the steps below and you’ll soon know exactly how to budget for irregular income!

1) How Irregular Is Your Income?

So how irregular is your income really? Over the past 12 months…

  • What has been your lowest income month?
  • What has been your best income month?
  • And what, on average, do you earn each month?

For some, your lowest income month may have been zero dollars and your best month has been $20,000. That’s extremely irregular.

For others, your lowest income month might be $3,000 and your best month is $4,000. Sure, it’s not a consistent paycheck each month, but it’s certainly more manageable than bouncing between $0 and $20,000 each month.

And, be honest with yourself here. What’s your average income each month?

I get that it can be volatile, but if you took your latest 12 months of paychecks, added them up, and then divided by 12, how much are you typically earning earning each month?

Keep this number handy as we move into the next steps…

2) How Much Do You Need to Survive Each Month?

Alright, so we’ve pegged your average income. Have you ever tracked your average spending from month to month? Do you know how much you really need to survive? 

If not, take a few moments to check your online accounts.

  • Check your bank accounts and check out the spend there
  • Also, take a look at your credit card usage
  • And, if you have accounts like Venmo or Paypal, give them a look too.

How much did you spend last month? How much in the month before that? 

Find your typical run-rate and call that your “average spend”.

Average Spend vs. Your Average Income

So what does your financial picture look like to far? Does your average income outweigh your average spend? Or is it the other way around?

If your average income is say, $5,000 a month, and your average spending month is $4,500, then that’s good! You’re currently spending less than you earn. And, while occasionally your earnings might be less than $4,500 in a given month, overall, you should have enough to float your expenses over a long period of time.

If, however, your average expenses are above your average income (say your income is $3,000 and your average expense month is $3,300), then no matter how volatile your income is…you’re in trouble. It’s either time you increase your income or you fight to reduce your expenses.

Related: How the Debt Snowball Really Works (Free Debt Snowball Spreadsheet Included!!)

Set Up Your “Get Through It” Fund

Alright, now it’s time to figure out your “Get Through It” fund – the fund that you’ll need stashed away to get through your low income months.

For Sporadic Income…

Let’s say your income is consistently sporadic (well there’s a misnomer if I ever read one…!!;)), meaning that any month can be your best month and any month could be your worst month. Your income is just up and down from week to week and month to month.

If this is the case for you, then:

  • Take your average monthly expense from the past year,
  • then subtract your worst income month.
  • The result is the amount you should have that’s above and beyond your emergency fund savings.

So, if your average expense is $3,000 a month and your worst income month is $1,000, then you should have a GTI (get through it) account with $2,000 in it. After those low months where you dip into it, be sure to replenish it as quickly as possible.

For Seasonal Income…

Let’s say your income is high for 9 months out of the year and then practically nothing for the other 3 months (I believe this is how teachers’ payouts used to be). You need to make sure you have a stash of cash that will get you through that three month income lull.

  • Take your average monthly expense from the past year,
  • then subtract your worst income month.
  • Then multiply that amount times the number of months where you have low pay.

If your average expense month is $3,000, and your worst income month is $0 for the span of three months, you’ll need $9,000 in your GTI fund (3 x ($3,000-$0)).

Your scenario obviously won’t exactly match one of the two specific examples above, but use the premise to mold and shape your very own GTI fund. 

3) List Out Your Monthly Bills From Most Important to Least Important

At this point, we know what our income looks like, and we know what our typical monthly spend looks like, but we haven’t discussed how you should be spending your income each month. This is imperative if you truly want to budget for irregular income….and not just wing it from month to month.

The premise is simple – heck, you can even just jot it down on a piece of paper if you want!

All you need to do is list out your spend items from most important to least important, and then next to it put the dollar amount you plan to spend each month. This may change from month to month, so get into the practice of sitting down at the beginning of each month and planning out your spend.

  • food – $400
  • utilities (lights, water, heat, etc.) – $200
  • mortgage/rent – $800
  • car payment, fuel, insurance – $400
  • childcare – $600
  • phone bill – $100
  • credit card/other debts – $100
  • clothing – $100
  • build up your GTI fund if it’s below your magic number
  • put remainder toward your debts

The above expenses add up to $2,700. Let’s say you earn your average income this month – $3,000. You buy food, pay the utilities, mortgage, car stuff, childcare, your phone bill, the credit card payment, and buy a few clothes. BOOM, you made it through the month on your irregular income.

What’s next?

Host a party? Go have a night out on the town? Hop on Amazon and find some cool stuff to buy?

Ummmmm, no.

You keep following your list!

Next is:

  • Build up your GTI fund

If that’s already full and ready for your next crappy income month, then…

  • you can put the remainder toward your debts (you know, so you can pay some of them off and have more discretionary income in the future.

If your debts are all paid off, congrats! You’re awesome! You can then move onto step #4!

4) Add Your Additional Wants to the List

When you’re trying to budget for irregular income, one of the toughest things is knowing when you can actually splurge and do something nice for yourself (or maybe for someone else, or maybe even for the future you…).

This step-by-step method makes those decisions easy.

Each month, when you list out your necessary expenses, don’t stop when you get through the list of “must-haves”, keep the list going with things you’ve always wanted to do (for those of you with consistent income, but a possible added income at any given time — which, by the way, is EVERYONE — , you should be making out the list below!). 

Your extended list might look something like this:

  • give to charity/church – $200
  • put money into retirement – $500
  • invest in the kids’ college fund – $500
  • put money away for that Caribbean vacation – $300
  • save up for a new kitchen – $400
  • real estate investments/early retirement fund

If you remember from our most recent example, you earned $3,000 and spent $2,700 on the necessary spend items. The GTI fund was fully funded and you had no debts, so you moved into step #4!

With your remaining $300, you simply keep scrolling down the list. So…

  • you gave $200 to your favorite charity, and
  • you put the remaining $100 into your retirement fund.

There! You just properly spent your irregular income!

If You Had an Amazing Income Month…

What if you earned $6,000 instead of just $3,000? Then what? 

Well, you just keep burning through your list of items (which is why we always make a long list every month. You just never know when you’re going to have that amazing income month!


  • give $200
  • put $500 into your retirement
  • stash $500 into your kids’ college fund
  • put $300 in your vacation fund
  • add $400 to your ‘new kitchen’ fund
  • and then you put the remaining $1,400 into your real estate fund (or some other fund if you’re not a real estate dreamer like me)!

Not so hard, right? You can absolutely budget for irregular income! And you know what? It’s actually kind of fun to spend on purpose!

It’s Your Turn! Time to Budget For Irregular Income!

Whether your income looks like the rocky mountains from month to month, or it’s perfectly consistent, I truly believe that everyone should read the instruction above and follow the advice given. ALL of us receive random money from time to time, and too many of us just blow it on something that’s meaningless to us in just a few months.

Instead of just going through life trying to survive each month, why not set yourself up to thrive and become wealthy?? It IS possible. All it takes is a little intentionality.

  1. Calculate your average income, as well as the typical highs and lows
  2. Calculate your average expense
  3. List out your necessary expenses from most important to least important. Calculate your GTI fund.
  4. Add your additional wants to the end of the list (for those higher income months)

That’s it! It’s not hard. You’ve just got to choose to do it!

Are you ready to budget for irregular income? You’ll be glad you did!!

Battle of the Mind Grow Rich Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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