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When you have an unpredictable income, everything about your finances can feel unstable. When you read advice about handling your finances, most of it won’t feel applicable to you because you don’t have the same income to budget month to month. It’s easy to feel alone and confused.

But you’re not alone, and there is no need to feel confused. There are plenty of people out there with income that fluctuates month to month. The ones who figure out how to find financial security in the long term build up strategies for tracking their finances and creating long term goals so they stay in control of their money.

Tip #1: Pay More Attention

While realistically it’s good for everyone to pay attention to their monthly spending, when you have an unpredictable income, it’s more important that you pay attention. Why? Because someone with the same income month to month will already have a feel for what they can routinely spend and stick to their budget. Your income, and your budget, will fluctuate. You need to pay more attention to your spending than most people do, and that’s okay! This is how you will take control and make your financial goals possible.

Tip #2: Use An App To Track Your Spending

There are plenty of apps that make this simple today. By doing this, you’ll be able to see how you’re sticking to your budget. If you’re at the store and want to make an unexpected purchase on something fun, you can open your app and see how much of your budget has already gone toward fun spending that month and whether the purchase aligns with your budget. At the end of the month, you’ll be able to review where your money went and see how you’re doing, so you can make adjustments for the next month.

Tip #3: Determine Your Bare Bones Budget

Sit down and write out exactly how much you need to live month to month. These are all your most essential expenses, like your rent, insurance, and food. If you have a yearly essential expense, like insurance, divide that number by twelve and include that percentage in your monthly minimum.

Tip #4: Determine Your Long Term Financial Goals

Do you want to save for retirement? Are you paying off student debt? These are savings numbers. Know this number and add it on to your income goal with your bare bones budget. Before spending on anything fun, this is the amount you ideally need to make each month. If it doesn’t align with the amount you’ve been earning, you either need to earn more income or find ways to lower your bare bones budget.

Tip #5: Have An Emergency Savings Fund

Ideally, you will have three to six months of your minimum budget saved in an emergency fund, though when you’re budgeting with an unpredictable income, it is much better if you can ultimately save nine months.

You won’t be able to do this all at once. Save toward it gradually and keep an eye on this as one of your long term financial goals.

This is particularly important to have for times when an income stream dries up or something doesn’t pay out for a long time. This will keep you financially secure in case anything comes up.

Tip #6: Be Patient With Yourself

Financial security and sticking to a budget that works for you doesn’t happen overnight. It takes some time to figure out a new way of managing your finances. Don’t get frustrated or get overly hard on yourself, and most importantly, don’t give up. Be patient with yourself and readjust when you notice you aren’t tracking your finances as well as you should be or that you’ve overspent in one particular area. Learn from these experiences and implement new strategies to better align with your goals. For instance, maybe the app you’re using to track your spending isn’t working for you. There are plenty out there, try another! Maybe your bare bones budget needs to be looked over again. That’s okay. Keep doing the work and you’ll get there.

This blog/website is only made available for educational purposes. It is designed to give visitors general information and a general understanding of select financial topics. It is not intended to provide specific financial or investment advice. Conduct your own due diligence or consult a licensed financial advisor/broker before making any and all financial/investment decisions.