How to Budget Irregular Income

From real estate agents to car salesman to freelance artists, many jobs produce irregular income.   How do you budget when you have no idea how much you’ll be taking home?*

Are you currently working a job in which no two paychecks are the same?

Maybe you’re commission only and always living in the stress of waiting on the next deal to close.

Here are a few steps you can take to create a budget when you earn irregular income.

1. Before creating a budget, open a separate business savings account.  This will be the account where your paychecks will be deposited.  You will make two types of strategic and systematic transfers to your regular checking account.

2. Establish a baseline 30-day budget.   This means a budget in which only minimums on debts and absolute necessities are paid—your housing expenses, your transportation expenses, food, basic clothing.  No eating out or unnecessary spending.   This number will represent the lowest transfer amount that you will transfer from your business savings to checking, which is the first type of transfer.

3. Once you have the baseline expenses, add to that discretionary expenses – personal services, going out to eat, spending money, etc. So BASELINE + DISCRETIONARY = 2nd Lowest Transfer Amount. You may note that as your starting a business, your personal budget will look lean. This is normal and temporary.

4. Since irregular income has high and low monthly amounts, the months with the high amounts will increase the balance in your savings account while you are still transferring the minimum amount needed to your regular checking account. Bottom line: leave your business savings untouched except for the regular transfers discussed above.

5. Avoid to temptation to overspend during the high-income months.  Instead allow that extra income to stay put in your business savings account

6. Don’t forget to budget for annual expenses as well for expenses like property taxes, car tires, expected home repairs, etc.  You should be able to budget for these as you’ve packed the pipeline of your business.

7. One other aspect to keep in mind is income taxes if your income is subject to self-employment taxes. We recommend a separate “hands off” savings account for self-employment taxes.

StoreHouse coaches are here to help you know how much to budget for all areas of life, including self-employment taxes. Contact us today at

* These steps assume that you have already built your business to a point in which you are able to sustain your standard of living.