This post may contain affiliate links. If you click and make a purchase, I may receive a small commission, at no extra cost to you. I only recommend products and services I use and love. Thanks for supporting The Little Frugal House!

Do you have an irregular paycheck? Does that make budgeting complicated and difficult?

When I worked my full time job, budgeting was so much easier. I got paid a set amount every two weeks. It was always the same, and so I knew exactly what to budget for.

Now that I work for myself full time, things aren’t so easy. I make a different amount each month, and I don’t always get paid at the same time.

Figuring out a budget around this irregular income was proving more complicated and pretty difficult.

I have found a few ways to budget irregular income easily and wanted to share those with you.

Use the following tips to figure out the best way to budget irregular income for you.

7 Ways to Budget Irregular Income

Real quick, are you getting free cash back yet? If not, you are totally missing out on free money! I love using Ibotta and Ebates to get free cash back when I buy groceries and shop online. It’s so easy to use and I get cash back or gift cards for free all the time!

You can sign up for Ibotta right here and get $5 when you upload your first receipt!

And sign up for Ebates right here and get a $10 bonus – make sure to download the browser extension, so you know when you are on a site that offers cash back!

1. Use your lowest income as a base line

   When you are making a budget, always use your lowest possible income, instead of an average or your highest income. By doing this, you are being conservative and making a smart budget.

   Using your lowest income will help you make sure you can pay all the bills even during your lowest income month.

   Use this cheap Budget Binder to help you figure out a budget that works for you and your pay schedule. This Budget Binder will help you make a super easy budget and get your money under control.

2. Pay bills first, and yourself second

   Once your bills are paid, pay yourself a monthly salary.

   Pay yourself this same amount every month to make sure your necessities are covered before you spend on extras.

   Related Post: Top 25 Frugal Living Secrets

3. Decide what to do with extra money

   Since you are budgeting with your lowest income in mind, you will likely have extra money other months. Decide what to do with that extra money so it doesn’t get lost.

   Do you want to use any extra money to pay down debt, build your emergency fund, or put in savings?

   Decide where you want this money to go. Then, after you pay your bills and yourself, move that money to it’s decided place.

   Related Post: The Multiple Bank Accounts You Need to Budget Better

4. Put more money away in high earning months

   When you have record earning months, put more money in savings and your emergency fund then. You can even keep a little extra in your checking account.

   This will be a back up or buffer if needed when you experience lower earning months. Make a rule that anything over X amount gets put away for later.

   Related Post: $1000 Savings Challenge + Free Printable

5. Live on last month’s income

   Since your pay days may vary, always live on last month’s income, instead of trying to live paycheck to paycheck.

   This will keep you ahead and make sure you always have enough money in your account when you need it.

   Related Post: 11 Books to Help You Save and Make More Money

6. Have an emergency fund

   An emergency fund is important for any type of budget. But when you budget for irregular income, an emergency fund is a must.

   You don’t know the exact date of your next paycheck or the amount, so you need an emergency fund. A good rule of thumb is to have 3-6 months of living expenses saved up – just in case the next paycheck doesn’t come when expected.

   Never take money from this account, unless you truly have no other choice. You can even set this account up at a different bank than your normal checking account, so you aren’t tempted to use the money.

   Related Post: 15 Ways to Save on Bills

7. Always have enough for one month of bills

   Bills are going to come regularly, even if your paychecks don’t.

   Make sure to always have a least one month of bills saved. Calculate your monthly bills, and make sure you always have that much.

   You can get a free monthly bill tracker printable here.

Making a budget when you get paid irregularly is a little more complicated, but it doesn’t have to be stressful. Use the tips above to find a system that works for you.

You will need to be a little more conservative, and have more in savings when your paychecks aren’t steady.

Working for myself is a dream come true. It does come with many challenges, but every challenge is worth it.

You might also enjoy…