5 Ways to Make Budgeting Irregular Income Easier


So, you’ve decided to make the transition from being a salaried employee to a freelancer budgeting irregular income levels.  I know the mix of emotions well — mostly elation and joy, with a healthy dose of trepidation and fear sprinkled in.  Some of the thoughts running through a newly minted freelancer mind might be: What if I can’t make enough to survive?  How do I deal with the loss of a guaranteed paycheck?

Relax.  Making the leap to running your own business is the hardest part of the whole process.  It can be scary to answer questions from your friends, family, acquaintances… often without knowing the answer for yourself!

Deciding to go freelance is no easy feat, but with some sound money management practices, you will be well on your way not just to being a freelancer, but to being a successful one at that!

Have an emergency fund.

An emergency fund, or “rainy day fund,” is important no matter what type of work you do, but it is critical for the freelancer with an irregular income.  The reason it is called an emergency fund is because the money it contains should be used for emergencies only.  That is the key.  

How much is enough, you ask? It depends on your spending habits and comfort level.  Some freelancers can live fairly modestly, especially if they are single and rent an apartment, for example.  When you bring a family or owning a home into the mix, however, it’s a whole different ball game.  For the former type of freelancer, a 3-month cushion can be enough (3 months of living expenses).  For the freelancer who is also supporting a family, a heftier cushion of 6-9 months of living expenses may be necessary.  

Though it may be tempting to dip into the emergency fund to smooth out your irregular income, don’t do it! It's also important to know the difference between a legit emergency fund and a simpler, more flexible “money cushion.”

Know your baseline expenses when budgeting irregular income.

Having a handle on your monthly expenses will empower you to know how much you need to make per month in order to get by.  Separate your expenses into two categories:

  • baseline/fixed expenses like rent or a mortgage, car payment, insurance, etc.
  • and variable expenses like food, entertainment, health/wellness, etc.

 Differentiating the two will help during the leaner months when you need to trim back a little fat — trim back on the variable expenses that will have less of an impact on your standard of living.  

It’s also helpful for a freelancer to know their bottom line — ie how much do you have to make per month in order to live and achieve your savings targets? Then I would suggest building in a 15% contingency into that for unexpected or lumpy expenses.   

Grab our free budgeting spreadsheets. Click here to subscribe for access to the best life vault and nab access to six other worksheets while you’re in there!

Cultivate other streams of income.


Many businesses are cyclical.  Usually, there will be a natural ebb and flow to any sort of freelance income.  This is why it’s important to have multiple streams of income, to reduce the risk of relying on one single source.  For example, you could be a freelance writer full-time, but also teach yourself Adobe Photoshop on the side in order to do graphic design work.  You could turn your knitting hobby into an Etsy business.  

Turning a hobby into a business is actually a great way to capitalize on what you already enjoy doing.  Why not do what you love, and make extra money at the same time!?

Forecast as much as possible.

For most freelance or self-employed workers, you only know what your income is going to be a month or two in advance.

 It depends on the type of freelance business you’re running, but for some, you may be able to map out your potential income a few months in advance.  Keeping track of this in an Excel spreadsheet or even just an itemized list will help you know when you can pull back a little and focus on the client at hand, and when you need to do some more lead generation to bring in a few more projects.    

Pro tip: It also helps to budget based on your lowest (projected) income month. You never want this income to be less than your baseline expenses, or else you could end up in credit card debt!

Be creative.

Today with the sharing economy, it is so much easier to come up with creative ways to make extra money, if needed.  Being a freelancer is hard enough!

Do you have an extra bedroom that you’re just using to store boxes? Clear it out and list it on Airbnb! Have a car that you’re not using? List it on Turo! Love dogs and have a fenced in yard? Apply to be a dog sitter on Rover.com!

When it comes down to it, managing your finances on a freelancer’s irregular income should be the easiest part of being a freelance employee – if you prepare for it!



Are you a freelancer, part-time, or hourly worker? You probably know how to stretch a dollar! While flexibility can be great, it can make budgeting a real hassle. Learn these best practices for budgeting irregular income so you can quit stressing about payday.

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