Guest Post: Three ways to budget when you don’t have a regular pay cheque

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If you are in a line of work that offers irregular hours and therefore irregular monthly pay, then do not fear — you’re certainly not alone. Many workers in the likes of retail, service and trade roles don’t have a set monthly income, which means it can be tough to create a watertight financial plan.

If having an inconsistent income is getting in the way of your financial planning, you’ll be relieved to know that there are plenty of ways to get your personal finances under control. 

Here, we discuss three ways to get a grip on your finances without having a regular income figure.

  1. Establish your baseline earnings and minimum outgoings

In any planning scenario, it often makes sense to establish a realistic worst-case scenario. That way, you know how bad things are going to be when the going gets tough and you can prepare accordingly to face it. 

In the case of working on an inconsistent income, this means setting your baseline income figure (the least you could possibly earn in a month) and your minimum monthly outgoings (the total of all your essential monthly costs like rent, bills, groceries), and building from there.

Ideally, indeed somewhat essentially, your baseline income should surpass your minimum outgoings figure — this way you know your basics are covered every month. If it doesn’t, you could do with making whatever adjustments you can to get the balance in your favour, so you don’t face an uphill struggle during the harder months.

  1. Create and work on an emergency fund

To help with the issues above, and to cushion the blow of an unexpected costs that may flare up from time to time, you need to start working on an emergency fund. Building a backup fund bit-by-bit each month makes sense for everyone, but especially for those without a fixed income.

You can manage this as per each month’s takings. Set a minimum deposit number then, if it’s a tight month, don’t contribute anymore, but when it’s a better month, make sure to pay more forward. This way, if and when you come to a month where your outgoings surpass your earnings for whatever reason, your emergency fund is there to save the day.

  1. Pay yourself a wage from your wage

If you’re in a situation where your minimum outgoings are always going to be covered by your income no matter what, look to start paying yourself a salary out of your income. If you can get used to spending from a fixed amount that is less than your baseline package, you’ll have some extra funding to stow away each and every month.

That extra money can go towards your savings, emergency fund or whatever else you wish to count the pennies for. They say you get used to a certain standard of living, so if you can accustom yourself to spending less than you earn, then you’re really onto a winner, regardless of what figure is coming in at the end of the month.

In the end, living under an irregular income is all about flexibility. Being ready to adjust and adapt your financial practices each and every month will play a key part in your plight, but it will also come down to establishing some sensible practices. Using the three ideas above will help establish some consistency to an otherwise inconsistent financial structure — and that will help you remain in a good position going forward.