3 Tips To Budgeting With A Variable Income


Managing your money and keeping on top of the bills is hard enough when you have a fixed income each month, so if you live on a variable income, it can be more difficult. If you are self-employed, for example, you can’t always guarantee how much money you will earn, so planning your bills around this can be tricky. Being able to carefully manage your hard-earned income is important for anyone, so here are 3 top tips to help if your income is much more irregular.

Only Borrow When You Need It

If your income amount is not guaranteed each month, you’ll want to keep your outgoings as low as possible and that means avoiding borrowing money unnecessarily. This way, you can keep any essential bills to a minimum each month and not feel as strained to maintain them when income is low. There are still options available online, such as at quick loans for bad credit that can help you when the unexpected occurs even whilst on an irregular income. If you can keep your borrowing habits to only when you need it, such as in a financial emergency, you’ll avoid building up debt from less essential purchases. This will also avoid a situation where you borrow more than you can afford to maintain. If you have some form of affordability that won’t cause further financial difficulties, an emergency loan can be enough to help you through.

Work Out Your Essential Outgoings

Knowing exactly what your essential outgoings are is crucial when receiving a variable income. You need to know exactly how much income is required each month to cover your most essential bills, otherwise you could get behind on payments, such as on a mortgage or rent, and put yourself at risk of charges or repossession. Go through all of your essential outgoings and tally them together, as this will show you the figure you need to earn at the very least. These types of payment should always be the priority over other bills due to the risks involved. Many lenders can help if you contact them before a payment is due to advise them you may struggle due to income. Ideally, you’ll want to avoid that scenario and have enough money to cover these essentials first.

Save Where You Can

To help ease the burden that a variable income can bring, saving what you can on a regular basis will help in the long term. This way, if your income is much less than expected one month, you can use any emergency savings to make up the difference. First, though, you need to have the money available to achieve this. Start small and then build up what you can into an emergency savings fund, something that you’ll only use when necessary. Gradually, you will have a significant amount saved to help you just in case. Planning ahead in this way can help in extreme circumstances, for example, if you become ill or injured and cannot work for a period. Having savings will also avoid borrowing further money and getting deeper into debt.