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3 Things That Help Me Budget on a Variable Income

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As someone who writes about personal finance, I’m constantly telling people how important it is to stick to a budget . A budget is an easy way to keep track of your spending, understand where your money goes, and carve out room for savings. I also like to practice what I preach — I, too, have a household budget . The thing is, I also have a variable income. As a freelance writer, my earnings can vary substantially from one month to the next — sometimes by several thousand dollars. And that makes budgeting more difficult. When you earn a salary and bring home the same amount each month, you have an easy total to work with. I don’t have that. Still, through the years, I’ve managed to make budgeting work for me. Here’s how. 1. I base my budget on my lowest projected earnings It’s very important to me to not spend more money than I earn. That’s why, in setting up my budget, I base my spending on the lowest amount I think I’ll earn in a given month. That way, I know I can cover my expenses. And if my earnings come in higher, I can easily save that money. 2. I tweak my budget constantly My lowest earnings expectations have evolved over time based on the number of ongoing projects I’ve picked up and other factors. That’s why I don’t set my budget and forget it. Rather, I generally review it every four to six months and make changes. I do sometimes have to tweak my budget temporarily to allow for circumstances. Last year, for example, when the pandemic broke, I stopped paying for childcare when schools shut down, but I also had to cut my hours to help my kids adjust to remote learning. My income took a hit. While that was going on, I made changes to my budget to reflect the situation. (Back then, I also had to budget triple for toilet paper since it was such a hot commodity and, well, we started going through a lot of it with everyone home all day.) 3. I put a line item in my budget for savings Saving money is important to me, and it’s something I aim to do monthly. But I don’t just leave my savings to chance — I budget for them. I have a line item in my budget for savings, and that helps me stay on track, because I force myself to save even during leaner months income-wise. Following a budget with a variable income isn’t the same as budgeting with a steady income — but it can still be done. Budgeting has helped me avoid debt and stick to different goals I’ve set. While it does take some effort, at the end of the day, it’s well worth it. SPONSORED: Top credit card wipes out interest until 2022 If you have credit card debt, transferring it to this top balance transfer card can allow you to pay […]

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