Tools Debt Freedom Planner Podcast
About
Brad
Contact Us
Send us Feedback Podcast Guest Request Request Brad to be on your Podcast
Join Roots!

Episode 251 - Ditch the Budget Stress: The Irregular Income Survival Guide

Imagine the stress of never knowing exactly how much you'll make each and every month. That's the reality for millions of people with irregular incomes. But what if I told you there's a way to manage your finances so you can live a stress-free life, regardless of how unpredictable your income is?   

 

John’s Story: A Real Estate Agent with an Irregular Income  

Let me tell you about a real estate agent. We're going to call him John. John loves his job—the thrill of closing a deal, the joy of helping families find their forever homes, and the flexibility of being his own boss. But there's a downside. His income is highly irregular. Some months John might sell three houses and make a substantial amount of money, while other months he might sell just one house, or worse, none at all. This inconsistency made it incredibly challenging for John to budget, save, and plan for his future. He was constantly stressed about whether he'd have enough to cover his expenses, and financial uncertainty was taking a toll on his peace of mind and overall well-being. John's story is common among those with irregular incomes, such as real estate agents, mortgage brokers, car salespeople, gig workers, freelancers, and the list goes on. The good news is that with a few strategic steps, you can take control of your finances, even if your income fluctuates.  

Key Tips to Manage an Irregular Income Effectively  

**1. Determine Your Bare Minimum Budget** Start by figuring out the absolute minimum amount you need to cover your essentials. This includes rent, mortgage, utilities, groceries, transportation, and any other non-negotiable costs that you have.

**2. Give Yourself a Regular Paycheck** Base this on the lowest average earnings that you expect and set a regular paycheck for yourself. This will help create stability and predictability in your finances.  

**3. Move Extra Money into Savings** Whenever you have a good month and earn more than your minimum budget, move the extra money into savings. This will serve as a buffer for emergencies or lean months.  

**4. Live on Last Month's Income** This is a game changer and where I want to focus the most. The idea is to always live on the income you earned the previous month. This way, you have a clear, accurate number to budget with. Setting this up can be tough, but it's absolutely worth it. Here’s how you can do it: First, try to set this up when you have a really good month or a few good months where you can take the extra earnings over and above what you need to pay for your essentials and put this into savings. Use this surplus to fund those expenses for an entire month. Another way to achieve this is to set it up during times when you receive an influx of money, maybe at tax return time, when you get a yearly bonus, or an unexpected windfall. This can give you the cushion you need to start living on last month's income.  

Exercise Discipline  

Once you achieve enough savings to fund an entire month, it's crucial to exercise discipline. It might be tempting to dip into this money for non-essential expenses, but remember that the goal is to create stability and reduce stress. Stick to your plan and ensure that the money set aside is used strictly for the following month's expenses.  

My Own Experience  

When I started doing this with my small business, it changed everything. There was no more worry about whether I'd make enough sales to pay my bills. I knew that whatever I made this month would fund the next month. If it's a low sales month, I'd have less money to play with, and I could adjust my budget based on the income I made. Moving forward, you're going to take your current month's income and put it into savings for the following month. In the event you have a low-income month or face unexpected expenses, you can adjust what you spend next month to accommodate that. It gives you a much bigger picture plan.  

Bonus Tip  

Continue to build savings for a business emergency or months that won’t cover the next month's income. Don't hesitate to dip into that savings when necessary, but make sure to replenish it during higher-earning months. Managing an irregular income can seem daunting, but with these strategies, you can take control of your finances and reduce your stress. The key is consistency, discipline, and planning ahead. If you found these tips helpful and want to dive deeper into achieving financial stability, I invite you to join our free workshop, Life Without Payments. It's an excellent opportunity to learn more about managing your money effectively and setting yourself up for a stress-free financial future. Sign up today and take the first step towards living a life without financial worry at debtfreedad.com. 

Resources Mentioned
Get better results with your finances in 30-60 days - GUARANTEED. Watch this video to learn how! - https://www.debtfreedad.com/payoff-debt-in-60-to-90-days 

Free Tools and Downloads at www.debtfreedad.com

Connect With Brad

Thanks For Listening

Like what you hear? Please, subscribe on the platform you listen to most: Apple Podcasts, iHeartRadio, Spotify, Tune-In, Stitcher, YouTube Music, YouTube

We LOVE feedback, and also helps us grow our podcast! Please leave us an honest review in Apple Podcasts, we read every single one.

Is there someone that you think would benefit from the Debt Free Dad podcast? Please, share this episode with them on your favorite social network!

Episode Transcript: 

Amber:  

Imagine the stress of never knowing exactly how much you'll make each and every month. That's the reality for millions of people with irregular incomes. But what if I told you there's a way to manage your finances so you can live a stress-free life, regardless of how unpredictable your income is? Hi, I'm Amber, today's host for the Debt-Free Dad podcast, where we help normal, everyday people like you take control of your finances so you can live a happier, less stressful life. Let me tell you about a real estate agent. We're going to call him John. John loves his job, the thrill of closing a deal, the joy of helping families find their forever homes and the flexibility of being his own boss. But there's a downside. His income is highly irregular. Some months, J john might sell three houses and make a substantial amount of money, while other months he might sell just one house or, worse, none at all. This inconsistency made it incredibly challenging for John to budget, save and plan for his future. He was constantly stressed about whether he'd have enough to cover his expenses, and financial uncertainty was taking a toll on his peace of mind and his overall well-being. John's story is common among those with irregular incomes, such as real estate agents, mortgage brokers, car salespeople, gig workers, freelancers oh my gosh and the list goes on.

Amber:  

The good news is that, with a few strategic steps, you can take control of your finances, even if your income fluctuates. Here are the key tips to manage an irregular income effectively. Number one you want to determine your bare minimum budget, so you got to start by figuring out the absolute minimum amount you need to cover your essentials. This includes rent, mortgage, utilities, groceries, transportation and any other non-negotiable costs that you have. Number two you want to give yourself a regular paycheck, so you're going to want to base this on the low-wage average earnings that you expect. Set a regular paycheck for yourself. This will help create a sustainability and predictability in your finances. Number three you're going to want to move extra money into savings. So whenever you have a good month and earn more than your minimum budget, move the extra money into savings. This way, this will serve as a buffer for a business emergency, as well as those lean months.

Amber:  

And we're going to dive into that, because the most important step, in my opinion, is number four, and that is to live on last month's income. Now, this is a game changer and where I want to focus the most. The idea is to always live on the income you earned the previous month. This way, you have a clear, accurate number to budget with. Setting this up, though, can be tough, but it's absolutely worth it, and here's how you can do it.

Amber:  

First, you're going to set this up on a good month, so you're going to want to try to set this up when you have a really good month, or a few good months, where you can take the extra earnings over and above what you need to pay for your essentials and put this into savings. Use this surplus to fund those expenses for an entire month. So you want to build up the surplus that can fund your entire month's expenses even a little bit of play money. Another way you could do this is to set this up during times where you receive an influx of money maybe tax return time, maybe you get a bonus every year, or you just have an unexpected windfall. This can give you the cushion you need to start living on last month's income. Here's the key, though. Once you achieve enough savings to fund an entire month, it's really important to exercise discipline during this process. It might be tempting to dip into this money a little for non-essential expenses. Remember that the goal is to create stability and reduce stress. Stick to your plan and ensure that the money set aside is used strictly for the following month's expenses.

Amber:  

When I started doing this with my small business, it changed everything. It was such a game changer. There was no more worry about oh my gosh, am I going to make enough sales this month to pay my bills? Oh my gosh, am I going to make enough sales this month to cover this next payment that comes out next week? I wasn't worried about all of the things that were coming up because I knew that in June, whatever I make this month in June, I am going to use it to fund July. So if it's a crappy month in sales because that's what I do in my small business I'm going to have less money to play with. So I'm going to be able to adjust my budget based on the income that I made. So once you have it all set up moving forward, you're going to take your current month's income and put it into savings for the following month.

Amber:  

Now, in the event you have a low income month or face unexpected expenses, you can adjust what you spend next month to accommodate that. It gives you so much more of a big picture plan. So here's a bonus tip I suggest that you continue to build a savings for a business emergency or small months that won't cover next month's income, and don't hesitate to dip into that savings. That's what it's there for. Just make sure to replenish it during higher earning months. I know it sounds easy, but it really is, once you get it into place. Yes, managing an irregular income can seem daunting, but with these strategies, you can take control of your finances and reduce your stress. Remember, the key is consistency, discipline and planning ahead. So if you found these tips helpful and want to dive deeper into achieving financial stability, I invite you to join our free workshop Life Without Payments. It's an excellent opportunity to learn more about managing your money effectively and setting yourself up for a stress-free financial future. Sign up today and take the first step towards living a life without financial worry at debtfreedad.com.

Search Our Episode Library

Categories

Check Out our Courses
Check out our Totally Awesome Debt Freedom Planner