Freelancers, commission workers, gig workers, seasonal employees—millions of people don't have a predictable paycheck. Here's how to budget anyway.
The Challenge
| Regular Income | Irregular Income |
|---|---|
| Same amount every 2 weeks | Different every time |
| Easy to automate | Harder to predict |
| Budget once, set it | Constant adjustment |
"I freelance and my income ranges from $2,000 to $8,000/month. Traditional budgeting advice never worked until I changed my approach."
The Buffer System
The core strategy: Budget from LAST month's income.
- All income goes into a holding account
- On the 1st, transfer a fixed amount to checking
- That fixed amount IS your budget
- Extra stays in the buffer
This turns irregular income into regular income.
Building Your Buffer
Target: One full month of expenses in the buffer.
| Monthly Expenses | Buffer Needed |
|---|---|
| $3,000 | $3,000 |
| $4,500 | $4,500 |
| $6,000 | $6,000 |
This means you're always paying this month's bills with money you already have.
Priority-Based Budgeting
When income is low, you need to know what to pay first.
The Priority Stack:
- Essential survival: Rent/, basic food, utilities, essential medications
- Keep earning: Transportation, phone, internet (if needed for work)
- Stay protected: Insurance, minimum debt payments
- Future you: Savings, extra debt payments
- Everything else: Entertainment, dining out, wants
Pro Tip
In high-income months, stack categories 4 and 5. In low-income months, focus on 1-3.
The Baseline Budget
Create a budget based on your LOWEST likely income month.
Example:
- Best month: $7,000
- Average month: $4,500
- Worst month: $2,500
- Baseline budget: $2,500
If you can survive on $2,500, you'll always be okay. Anything extra goes to buffer and goals.
Managing Good Months
Do This
When income exceeds baseline:
- First, refill the buffer
- Then, attack debt or goals
- Then, allow some lifestyle spending
- Never inflate fixed expenses based on good months
The biggest trap is treating high-income months as normal and locking in expenses you can't sustain.
Managing Lean Months
Do This
When income is below baseline:
- Cut discretionary spending immediately
- Pull from buffer if needed
- Focus only on priorities 1-3
- Hustle for additional income
Tax Considerations
Watch Out
No one withholds taxes for you. You need to:
- Set aside 25-30% of every payment
- Pay quarterly estimated taxes
- Keep records of all income and expenses
Open a separate savings account just for taxes. Don't touch it.
Tools That Help
| Tool | How It Helps |
|---|---|
| YNAB | "Age your money" philosophy built for this |
| Separate accounts | Buffer account, tax account, operating account |
| Spreadsheet tracking | Log every payment as it comes |
| Invoice tracking | Know what's outstanding |
Quick Win
Calculate your baseline budget right now: the minimum you can survive on. This is your anchor number for irregular income management.