Budgeting is an important part of financial health. Though admittedly, it can be tricky to manage for those that have unstable incomes. 

Financial experts agree that a written budget can help people save more, get out of debt, and make better spending choices. It seems like an easy task to write out a budget, but it is not simple for everyone. 

Many people’s incomes vary each month. Budgeting when the amount of money coming into the home constantly changes seems impossible, but there are ways to make it work.

Start with Expenses

Someone with an irregular income should start with the total of their expenses. Add all regular expenses like utilities, rent, and loan payments. Include an average for what the household spends per month on groceries and gas. Track these expenses for a couple of months to avoid underestimating. People often overspend on expenses like entertainment, food, and clothing. Finally, include a specific amount to apply towards an emergency fund and other savings plans.

Estimate Base Income

Look at old tax returns to estimate what the household brings in each year. Deduct from the income spent on taxes and divide by 12 to give an example of monthly income. In the event of recent changes to the household income, use the lowest-earning month as the base income. Make sure that all expenses can come out of the base income.

Adapt the Budget

People often cannot meet their expectations with their current income on their first budget attempt. Look at ways to pare down grocery costs or eliminate unnecessary expenses rather than reduce the savings. Cancel unused gym memberships, consider streaming services instead of a monthly cable bill, and dine out fewer times per month.

Set an Amount

To make the math simple, say the budget totals $4,300 per month. There are about 4.3 weeks each month, so the family needs about $1,000 a week. When the household earns $1,500 in a week, set aside $500 and use the remainder for budgeted items. Keep the $500 tucked away for the weeks when the family does not meet the necessary $1,000 requirement.

Do not change the budget every time household income increases for a few months. Irregular income can drop as fast as it increases, and it is vitally important to have extra cash available for those moments. Only adjust the budget if the income becomes a regular established paycheck.